The Port of Vancouver handled a record 72.5 million tonnes of cargo in the first half of this year, a bright spot for British Columbia as housing markets, the forestry sector and other parts of the economy sag.
Canada’s largest port said cargo volumes rose 0.5 per cent compared with the 72.2 million tonnes processed in the first six months of 2018.
“While Canada is certainly not exempt from the challenges impacting global trade, the diverse range of trading partners and cargo handled through the Port of Vancouver ensures the entire port remains resilient," Robin Silvester, president of the Vancouver Fraser Port Authority, said in a statement.
But a new report by Central 1 Credit Union cautions about the impact of trade uncertainty in the second half of 2019.
"A compendium of factors including deterioration in the global trade environment, retrenchment in the forestry sector and slowing consumer spending on big-ticket items will weigh on growth,” Central 1 deputy chief economist Bryan Yu said in his outlook for the B.C. economy.
Mr. Yu said reduced sales activity in real estate, as well as downturns in mining and forestry, will contribute to slower growth in gross domestic product in B.C. of 2.2 per cent this year, compared with 2.4 per cent in 2018.
Reduced housing sales activity, "owing to federal mortgage stress tests and provincial government tax measures, has dragged the resale market into recession-like conditions,” he said. “Meanwhile, the forestry sector has experienced sharp contractions since robust activity in early 2018.”
Undaunted by the forestry slump, B.C. billionaire Jim Pattison launched an unsolicited, $981.7-million bid this week for full control of Canfor Corp., Canada’s second-largest lumber producer. Mr. Pattison, through Great Pacific Capital Corp., owns 51 per cent of Vancouver-based Canfor. He wants to take the company private with his cash bid of $16 a share for the 49 per cent of Canfor stock that is widely held.
Last month, Canfor announced the indefinite shutdown of its sawmill in Mackenzie, B.C., and plans to chop one of two shifts at its mill in Isle Pierre, B.C., in September.
“A rising number of mills have closed due to current market conditions and lack of long-term timber supply, marking a trend that will likely persist,” Mr. Yu said.
He warns that global economic conditions are deteriorating amid the U.S.-China trade war.
China’s ban on Canadian canola has eroded total exports of the agricultural product. The Port of Vancouver said it saw a 12.6-per-cent decline in canola shipments in the first half of this year versus the same period last year. Lumber exports slipped 1.6 per cent and other wood product shipments fell 10.2 per cent.
But many commodities enjoyed strong demand, with specialty crop exports surging 34.2 per cent, potash and potassium-based fertilizer shipments jumping 27.3 per cent and wheat exports rising 22.4 per cent.
Imports and exports of goods in containers set a record, with 1.7 million shipments handled in this year’s first half, up 3.5 per cent from the same period of 2018. The shipping industry deploys large vessels to carry containers, which are reusable steel boxes measured as 20-foot equivalent units.
“The Port of Vancouver is definitely a significant driver of the economy and reflective of the trade that goes through the region,” Mr. Yu said in an interview.
The Vancouver Fraser Port Authority is warning that the West Coast could run out of capacity to handle container shipments within six years. The port authority said it needs to win regulatory approval to build its Roberts Bank Terminal 2 site that would be situated on reclaimed land south of Vancouver, with operations opening in 2029.
But a rival proposal from a tenant, GCT Global Container Terminals Inc., has added to the uncertainty over how best to expand trade capacity.
Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.