A Guide to the BC Economy and Labour Market
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Regions

In the Major Industries section, the regions of the province are described. There eight Development Regions: Vancouver Island/Coast, Mainland/Southwest, Kootenay, Cariboo, Thompson-Okanagan, North Coast, Nechako and Northeast. Because the populations of North Coast and Nechako are small, data for these regions have been combined.

A map showing the boundaries of these regions is in Appendix 3.

Relationships between industries: direct and indirect effects:

There are many interactions among industries in the economy, and it is important to understand both the direct and indirect effects of an industry on the economy. Think about what is involved in producing paper. First, a logger has to cut a tree down. Then, it is transported to a mill (a service that may be provided by the transportation industry), chipped and turned into pulp which is further processed into paper (manufacturing).

In the example just given, the direct effect can be measured in terms of the value added or employment provided by the paper manufacturer. The indirect effect is a measure of the resultant increase in the activity of the industries that supplied goods and services used by the paper industry. In this example, the indirect effect would include the increased output of:

  • the manufacturer of the chainsaw used by the logger;
  • the logger who cut down the tree;
  • the transportation company that shipped the log to the mill; and
  • the mill that produced chips from the log, which were then sold to the paper manufacturer.

Resource-based Industries

These are industries that involve the harvesting, extraction and processing of natural resources. This grouping includes all of the primary and some of the secondary manufacturing industries.

Primary resource-based industries include:

  • Agriculture
  • Fishing
  • Forestry & logging
  • Mining, oil & gas extraction

Resource-based manufacturing industries include:

  • Food & beverage processing (related to agriculture and fishing)
  • Wood and paper manufacturing (related to forestry & logging)
  • Petroleum & coal products, non-metallic mineral products, primary metals and metal fabricating (related to mining, oil & gas extraction)

Why is agriculture and food and beverage manufacturing included in this grouping? In some ways agriculture is not all that different from forestry or fishing. Farming involves planting, caring for, and eventually harvesting a product. In the case of forestry and fishing, the product being harvested is usually wild (but can be cultivated in tree or fish farms). The resource still needs to be managed and cared for, in a way that's similar to how a farmer cares for livestock or crops. That's why agriculture, food and beverage processing has been included in resource-based industries.

Seasonal Employment

The need for workers in some industries can fluctuate from month to month, or from season to season. For example, retailers are often busier at Christmas, gardeners and nurseries are usually busiest in the spring and summer months and farmers harvest their crops in the summer and autumn months. Seasonal employment patterns give an indication of the extent to which the time of year influences the need for workers in an industry.

Secondary industries

Manufacturing (both resource and non-resource-based), construction, and utilities which distribute electricity, oil, gas, and water, are often referred to as secondary industries.

Sectors

Industries producing related goods or services are sometimes grouped into sectors. The economy is often divided into two large sectors: goods and services. Within these sectors, smaller industry groupings may also be used.

For example, the logging industry produces logs, which are sawed into lumber by the wood industry, or chipped and turned into pulp or paper by the paper industry. Because they are related, these industries are often grouped together into what is called the forest sector.

Self-employment

Some people who have jobs are not employed by companies or organizations. They are self-employed, which simply means that they work for themselves. Self-employment can occur in all sorts of different jobs and industries. People who run corner stores or other small businesses, farmers, fishers, lawyers, housekeepers, gardeners, doctors and people in many other professions can be self-employed. Many self-employed people work on their own or with unpaid help from family members. Others, however, have paid employees.

Service sector

The service sector includes a wide variety of industries ranging from transportation, communication, real estate and financial services to retailing, hairstyling, education, health and public administration. Services cannot be handled or stored; they are consumed and produced at the same time. For example, you are a consumer of air transportation services when you are on a plane, retailing services when you visit a store, entertainment services when you go to the theatre, or accommodation services when you stay at a hotel.

Measuring GDP in service industries

We are used to thinking about GDP in terms of goods production: making doors or computers, building ferries, constructing houses, or printing books and magazines. But there is also value added to the economy when you visit a barber or hairstylist, when you buy a meal at a restaurant, travel on a bus or airplane, go to a movie theatre, or visit a doctor.

In some cases (as in our millworking example), it is easy to calculate the GDP resulting from a particular activity. That's because the economic activity that is being measured involves transforming basic materials into a finished product. We can determine the value of the final product and the cost of the materials, supplies, energy and services used to produce it relatively easily.

How do you measure the economic output of a service such as health care, education or defence? For these types of services, there is not a single product or group of products that you can count or measure to put a value on the industry's output. Yet health care, education and government services employ a lot of people to provide services that are both needed and valued by society.

In cases like this, we usually base our estimate of GDP on the value of wages and salaries earned by workers in the industry, supplemented by other information (for example, data on the use of capital equipment) if it's available. Labour income is used to estimate output because it is one way of measuring the value placed on the work done by the people who provide these services.

In other words, for some service industries there's a very strong relationship between GDP and labour income. Because of this, the ratio of GDP to employment (i.e., labour productivity) in these industries is more or less constant over time.

Temporary Workers

The definition of temporary workers is based on the intentions of the employer and the characteristics of the job. These are workers who have been hired to meet a temporary need for additional staff. These positions are not intended to be permanent. Examples of temporary workers include additional staff hired by a retailer for the pre-Christmas rush or farm workers hired on a temporary basis to help with harvesting or other short-term needs.

Unemployment

Unemployment statistics are based on a survey in which people are asked if they are currently employed. If they do not have a job, they are asked whether they are actively looking for work. Those who are looking for work are counted as unemployed, and are included in the labour force. If they are not looking for work, they're excluded from the unemployment statistics.

Being unemployed does not necessarily mean that you are receiving Employment Insurance (EI) benefits. Many people who are unemployed receive EI, but others may be living off their savings. They may also be supported by relatives or friends, or they may be receiving social assistance.

Unemployment (jobless) rate

The unemployment (jobless) rate is calculated as the ratio of the number of people who are unemployed (i.e., looking for work) to the total labour force.

Union Coverage

Union coverage is a measure of the extent to which workers in an industry are covered by collective agreements negotiated between labour unions and employers. It is not the same as union membership, since some workers who are covered by a collective agreement have not actually joined a union.

Value-added manufacturing

This term is sometimes used to describe manufacturing activities that involve more processing than simply turning logs into boards or chips or grinding wheat into flour. Producers of doors and windows, for example, are considered to be value-added manufacturers. Manufacturers that produce electronic products, trucks, books and magazines, toys, clothing, and many other manufactured goods are involved in what's often called value-added manufacturing.

Wage rates

Whether employees are salaried or paid by the hour, the wages they receive usually reflect the value added to the economy by the work they do.

Factors such as general working conditions, the risk associated with doing a job, the training that's required, the amount of responsibility a worker has, the usual hours of work, the type of equipment used in production, and collective agreements with unions all influence pay scales. These factors contribute to wage differences in various industries and among workers in different types of occupations.

Working Aged Population

The working aged population includes those between the ages of 15 and 64.

A Guide to the BC Economy and Labour MarketA Guide to the BC Economy and Labour Market