TORONTO, March 19, 2013 /CNW/ - British Columbia's economy limped into
2013 after growth slowed at the tail end of last year, according to the
latest RBC Economics Provincial Outlook released today. Tepid economic activity and unexpectedly weak capital
spending intentions prompted RBC to trim the province's real GDP growth
from 2.3 per cent to 1.6 per cent for 2013.
The RBC report notes that provincial employment fell between October
2012 and January 2013, doing little to revive personal income growth.
B.C.'s retail sales and manufacturing shipments also stagnated in the
fourth quarter of 2012, and activity in the home resale market
continued to slide. Residential construction was flat at best, while
housing starts weakened.
"While it was a slow start to the year, we expect that the relatively
soft economic picture in British Columbia will be short-lived. In fact,
we are already seeing signs that housing resales are stabilizing and
new motor vehicle sales are improving, and that employment regained its
footing in February," said Craig Wright, senior vice-president and
chief economist, RBC. "We are particularly encouraged by the sustained
recovery in U.S. home building and its implications for B.C. lumber as
provincial exporters will reap the benefits of increasing demand from
south of the border."
Business capital spending in the province is expected to play a smaller
role than previously anticipated, with the most recent Private and
Public Investment survey by Statistics Canada polling results that
counter RBC's earlier thesis that stronger non-residential investment
would be a prime growth engine in 2013.
"Multi-billion dollar spending intention declines in the mining, and oil
and gas industries were significant disappointments. Needless to say,
this may not be the year for an investment boom in B.C.," noted Wright.
The Outlook notes that intense pressures on B.C.'s revenues from a
rollback in natural gas royalties and the desire to balance the books
by 2013-2014, played into the budget blueprint in February - the
provincial government stuck to its commitment to eliminate the deficit
by holding the line on spending, raising taxes and selling assets.
The RBC Economics Provincial Outlook assesses the provinces according to
economic growth, employment growth, unemployment rates, retail sales,
housing starts and consumer price indices. The full report and
provincial details are available online as of 8 a.m. ET today at rbc.com/economics/market/pdf/provfcst.pdf.
For further information:
Craig Wright, RBC Economics Research, 416 974-7457
Robert Hogue, RBC Economics Research, 416 974-6192
Elyse Lalonde, Communications, RBC Capital Markets, 416 842-5635