Manufacturing

Many people think of manufacturing in terms of vehicles rolling off production lines in Windsor and Oshawa. Automakers in Ontario dominate the news about Canada’s manufacturing sector because they play such a big role in the economy of Canada’s largest province. However, the auto industry is a very minor player in BC.

So what do we manufacture here? The province’s manufacturing industry originally developed around processing the abundant natural resources harvested or extracted in the province: canning salmon, processing fruits and berries, producing lumber and paper, and smelting and refining ores. These activities still dominate manufacturing in BC, but their role has been diminishing over time as other manufacturing industries have become more prominent.

A large — and growing — share of BC’s manufacturing industry isn’t related to the resource sector at all. These manufacturers are engaged in many different types of activities, including shipbuilding, making aircraft parts and traffic light switching systems, or manufacturing signs, fibre-optic cables and plastics. They print books and brochures, build furniture, and make pottery, machinery and clothing. BC firms produce vitamins and health care products, computers and electronic products, and a host of other types of goods.

BC’s manufacturing industry is a significant player in the economy. It’s the second-largest employer in the goods sector, and ranks fourth in the economy as a whole. And it’s an industry that has seen a lot of changes over the last few years.

What's included in this industry?

Manufacturing is the process of converting raw materials into a finished product that can be traded or sold. This can be done by mechanical, physical or chemical means.

Plants, factories and mills that use power-driven machinery and equipment are typical in the manufacturing industry. However, it also includes home-based businesses that make hand-crafted goods, as well as bakeries, candy stores and custom tailors that produce and sell their goods onsite.

BC manufacturers make a broad range of products, including pharmaceuticals, computers, aircraft, food, lumber and paper

The province’s manufacturing industry is quite diverse, but resource-based activities remain dominant. Wood, food processing, metal fabricating and paper producers are the biggest employers. Forty-seven percent of manufacturing workers have jobs in these industries. That’s down from 52% at the beginning of the 1990s. The remaining resource-based manufacturers are relatively small employers. Other significant employers include manufacturers of miscellaneous products, transportation equipment, furniture and printed matter, all of which employ at least five percent of the workforce in this industry.

Four of the five biggest employer industries in manufacturing are resource-based¹⁷

What's happened since 1990?

The manufacturing sector has lost ground since 1990

The manufacturing industry has seen its fortunes rise and fall during the last decade and a half. The industry lost a lot of ground during the 1990s, with its share of GDP dropping about two percentage points. The decline was briefly reversed after the turn of the century¹⁸ but the industry has since resumed its downward path as some key players, including wood and paper producers, have faced challenges in recent years. Manufacturing now accounts for a smaller share of both GDP and employment than was the case in 1990.

Manufacturing is becoming less resource-oriented

During the last decade and a half, the composition of BC’s manufacturing industry has been changing. Most of the industry’s GDP (70%) and employment (57%) still originates in resource-based manufacturing, but the focus is gradually shifting to a greater emphasis on other products such as electrical equipment, chemicals, plastics, clothing, and computers & electronics.

This has partly been fostered by free trade agreements, which have opened up new markets for Canadian products. As well, new types of manufacturing have emerged, as companies have responded to changes in technology, together with shifting consumer and business demand for various types of products.

Since 1990, the share of manufacturing GDP that originates in non-resource industries has climbed from 22% to nearly 31%. These industries now provide four out of every 10 manufacturing jobs.

Non-resource-based manufacturing accounts for a growing share of total GDP and employment

The rising importance of non-resource-based activities in BC’s manufacturing industries is the result of strong growth in these manufacturing activities, combined with slow growth (and even decline) in some of the large resource-based industries, such as the wood and paper industries.

Between 1990 and 2008, GDP in manufacturing increased 24%, while the number of jobs in the industry grew just 6%. The job growth was due to a 28% increase in the number of people working non-resource based manufacturing industries. GDP growth in these industries was even stronger (+77%).

Employment and GDP in non-resource based manufacturing has expanded significantly since 1990, but resource-based manufacturers have not fared as well