TORONTO, June 3, 2015 /CNW/ - British Columbia's economy is on an
impressive upswing that is set to propel the province to the top of the
growth rankings in 2015, according to the latest RBC Economics Provincial Outlook released today. RBC forecasts real GDP to grow by a solid 3.0 per cent
in 2015, followed by 3.1 per cent in 2016.
"We've boosted British Columbia's growth forecast for this year and next
based on strong consumer spending and hot housing activity," said Craig
Wright, senior vice-president and chief economist, RBC. "In addition,
lower gas prices seem to have more than offset any dampening of
confidence resulting from disappointing labour market performance."
RBC says that housing activity shows no signs of abating; home resales
in Q1 surged to the highest level since 2009, and, with inventory
unable to keep pace with buyers' demand, average annual home price
gains accelerated into the double digits. British Columbians are
realizing the wealth effects of rising home valuations and increased
purchasing power as a result of lower gasoline prices. RBC notes that
this combination has likely spurred an upturn in consumer spending.
The Provincial Outlook indicates that consumer spending levels will
remain firm through 2015, though the recent robust pace is unlikely to
be sustained following a record number of new vehicle sales in the
first quarter. British Columbia's domestic demand is being supported by
positive demographic factors, including a growing number of Ontarians
relocating to the province.
"Despite the recent erratic behaviour of the labour market, British
Columbia remains an attractive destination with population growth in
the province outpacing the national average for the first time since
2010," said Wright. "We believe the record drop of 29,000 jobs in April
will be short-lived as recently there have been firmer wages and solid
gains in hours worked, which point to sustained demand for labour. This
will likely spur a turnaround in hiring in the coming months."
The province's international merchandise exports have performed
respectably so far in 2015, buttressed by exposure to growing export
markets and a more competitive Canadian dollar. In particular, demand
for lumber drove both trading activity with the U.S. and exports to
China and Japan. However, overall export gains were tempered by weak
natural gas exports on account of anaemic prices.
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/economic-reports/provincial-economic-forecasts.html.
For further information:
Craig Wright, RBC Economics Research, 416-974-7457
Laura Cooper, RBC Economics Research, 416-974-8593
Elyse Lalonde, Communications, RBC Capital Markets, 416-842-5635