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Capital Constant (Real) Dollar Estimates Economic Growth Employment (Work Force) Establishment Full-Time and Part-Time Employment Goods Sector Gross Domestic Product (GDP), or Value Added Imputed Rental Income Indices Industries Inputs Labour Labour Force Labour Income Measuring GDP

The New Economy: Tourism and High Tech Occupations Primary Industries Production and Output Productivity The Production Process Regions Relationships Between Industries: Direct and Indirect Effects Secondary Industries Self-Employment Service Sector Unemployment Unemployment Rate Union Coverage Value-Added Manufacturing Wage Rates

Regions

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

A map showing the boundaries of these regions may be found in Appendix 4.

Relationships between industries: direct and indirect effects:

There are a lot of interactions among industries in the economy, and it's important to understand both the direct and indirect effects of an industry on the economy.

Think about what's 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.

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 wood 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's called the forest sector.

Self-employment

A lot of people aren't 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're used to thinking about GDP in terms of goods production: making doors or computers, building ferries, constructing houses, or publishing books and magazines. But that's only part of the story.

There's 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 when you visit a doctor. In some cases (as in our mill working example), it's easy to calculate the GDP resulting from a particular activity. That's because the economic activity that's 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 isn't 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 as a proxy for output because it's one way of measuring the value that's placed on the work done by the people who provide these services.

The result of all this is that, 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.

Unemployment

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

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

Unemployment 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

The degree of 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's 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. Producers of doors and windows, for example, are considered to be value-added manufacturers. Some manufacturing industries aren't based on processing natural resources. They produce electronic products, trucks, books and magazines, toys, or other manufactured goods. They're all part of 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 that they do. Factors such as general working conditions, the risk associated with doing the 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 all contribute to wage differences in various industries and among workers in different types of occupations.