BC: The economy is continuing to be strong. However, external conditions have weakened in the province according to a new report.

A high Canadian dollar, which is hurting many businesses, has contributed to a decline in manufacturing shipments in 2007, the province's quarterly report for 2007/08 suggests.

"B.C.'s domestic economy continues to show robust growth, with employment gains, and strong retail sales and housing starts," said Finance Minister Carole Taylor. "But the performance of B.C.'s export sector is a different matter."

Other problems which the province is facing currently are: the falling demand and prices for natural gas and lumber, as well as the deterioration of the American economy and of course the volatility of world markets.

"Weaker external conditions have a real impact," said Taylor. "Natural resource revenues are now down $754 million from budget."

Even with the problems, natural resource revenue is up $635 million in the province, since the last report. However, much of this can be attributed to tax adjustments and the Crown's net income.

The provincial surplus is also on the rise, with the forecast calling for $2.1 billion, an increase of $525 million.

Spending is also set to rise, to an estimated, $110 million.

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