Proposed LNG projects in the North Coast region spur growth while residential and public projects drop
Submitted.Total capital cost of major projects in B.C. hit a record high in the second quarter of 2013 on a surge in proposed LNG projects, according to the Association of Consulting Engineering Companies – British Columbia (ACEC-BC)’s BC MPI Review, released today. The BC MPI Review is a quarterly report that provides analysis on the Province of British Columbia’s Major Projects Inventory.
Total capital cost of major projects in BC reached $299.4 billion in the second quarter of 2013, representing an 8.8 per cent jump over the previous quarter and 26.5 per cent higher than one year earlier. Total capital cost represents the combined value of projects identified as proposed, construction started, completed and on hold.
“The data shows that the resource sectors, and oil and gas in particular, are not only a major driver for growth in B.C., but their influence continues to strengthen rather than wane,” said Keith Sashaw, President and CEO, ACEC-BC. “The investment community’s appetite continues to grow for the North Coast region where the resources are largely based.”
The North Coast region reported a large 45.7 per cent jump in proposed projects to $99.3 billion in the second quarter from the previous quarter and propelled the year-to-year gain to 137.5 per cent. The key drivers of this gain were the Pacific Northwest LNG and the Prince Rupert LNG projects. Combined with the manufacturing sectors’ proposed Kitimat oil refinery and related project investments, resource-related projects account for more than $50 billion.
“Moving the projects represented in the mining and oil and gas category from the proposed to the construction started phase will have a profound and formative impact on our province’s economy,” said Sashaw.
The North Coast region continued to have the highest proposed and total capital cost dollar amount of any region in the province. Of note this quarter is the 50 per cent jump in proposed projects in the mining and oil and gas industrial category, rising from $44.4 billion in the first quarter to $66.6 billion in the second quarter of 2013.
New proposed natural resource and related projects pushed total project costs to new highs with a 39.3 per cent jump in the second quarter compared to the first quarter. The mining and oil and gas sector became the largest at $80.9 billion in the second quarter by a wide margin. The manufacturing sector saw a large 45.4 per cent increase to $28.8 billion in the second quarter almost exclusively on the proposed Kitimat oil refinery and related project investments.
Total project costs for residential and commercial projects held second place at $58.8 billion, a growth of only 2.4 per cent over the quarter, with proposed projects down slightly (0.7%). The slow growth may be attributed to real estate market slowdown and cautions of mortgage rate increases.
Q2 2013 Major Project Inventory Highlights:
Project total capital costs by project status, Q2 2013 vs Q1 2013:
– Proposed: 18.9 per cent increase to $194.8 billion
– Construction Started: 2.5 per cent drop to $83.6 billion
– Completed: 41 per cent drop to $1.1 billion
– On Hold: 16.4 per cent drop to $19.9 billion
Project total capital costs by industrial category, Q2 2013 vs Q1 2013:
– Residential & Commercial sector: 2.4 per cent increase to $58.8 billion
– Transportation & Warehousing sector: 3.0 per cent drop to $52.2 billion
– Mining & Oil & Gas Extraction sector: 39.3 per cent increase to $80.9 billion
– Utilities sector: 11 per cent drop to $47.8 billion
– Manufacturing sector: 45.4 per cent increase to $28.8 billion
– Public Services sector: 12.1 per cent drop to $7.5 billion
– Other Services sector: 0.5 per cent drop to $23.3 billion
The BC MPI Review is a quarterly report prepared by ACEC-BC that provides insight and analysis on the Major Projects Inventory, published by the British Columbia Ministry of Jobs, Tourism and Skills Training and Responsible for Labour. The Major Projects Inventory, which is published quarterly, lists all major projects that are proposed, planned or underway in British Columbia. These are projects with a capital cost of at least $20 million each within the Lower Mainland and projects valued at $15 million or more apiece in the rest of B.C.
To read the report simply
About the Association of Consulting Engineering Companies, British Columbia (ACEC-BC)
ACEC-BC is British Columbia’s provincial association of engineering consulting firms. ACEC-BC represents 90 of BC’s consulting engineering companies that provide engineering and other technology-based intellectual services to the public and private sectors, and are integral contributors to major projects in British Colubia. ACEC-BC firms employ 8,000 people in British Columbia comprised of a workforce of engineers, geoscientists, technicians, technologists and other support staff.