Strength in housing sector boosting British Columbia's economy

OTTAWA, June 13, 2016 /CNW/ - B.C.'s booming housing sector will be one of the main drivers of economic growth. The province will continue to lead the country in growth in 2016-17 with gains in real GDP of the 3 per cent in both years, well above anticipated increases at the national level, according to The Conference Board of Canada's Provincial Outlook: Spring 2016.

"British Columbia's economy has been growing by 3 per cent since 2014 and this positive outlook is expected to continue for the foreseeable future," said Marie-Christine Bernard, Associate Director, Provincial Forecast. "Strength in forestry, construction, transportation and the real estate industry put the province in an enviable position as Canada's economic growth leader."

HIGHLIGHTS

• B.C.'s economy will outpace all other provinces this year, posting real GDP growth of 3 per cent this year and next year as well.
• Only four provinces are forecast to see real GDP growth above 2 per cent this year: British Columbia, Ontario, Manitoba, and P.E.I.
• The commodity price slump will continue to hurt the economies of Newfoundland and Labrador, Saskatchewan, and Alberta. The wildfires in northern Alberta will have a short-term economic impact but rebuilding efforts will lift real GDP in 2017.

Aside from B.C., only three other provinces are forecast to see real GDP growth above 2 per cent this year: Ontario, Manitoba, and P.E.I. Ontario is benefiting from favourable terms of trade that improve the competitiveness of Canadian goods and services on international markets. The province's real GDP is expected to increase by 2.8 per cent in 2016 and 2.6 per cent in 2017.

Growth in Manitoba's economy is forecast to reach 2.1 per cent in 2016 and 2.6 per cent in 2017. Services will see healthy increases as Manitobans are on a spending spree due to strong employment and wage gains from recent years, while manufacturing will drive growth in the goods-producing sector.

Prince Edward Island should see strong growth this year and next. Real GDP growth in 2016 is forecast at 2.3 per cent, mainly the result of a solid construction and housing sector.

Quebec's economy is slowly gaining momentum. After subdued growth in the last few years, real GDP is forecast to improve to 1.8 per cent in 2016, thanks to sound job creation, stronger wage increases, and federal fiscal stimulus.

Nova Scotia's real GDP is set to increase by 1.5 per cent in 2016, thanks to its strong manufacturing sector. Demand from south of the border and the competitive advantage of a weaker Canadian dollar will keep fuelling demand for manufactured goods from the province, such as tires and food products.

Meanwhile, the commodity price slump will continue to hurt the economies of Alberta, Saskatchewan, New Brunswick, and  Newfoundland and Labrador. With another difficult drilling season, Alberta is dealing with the worst economic downturn in 30 years. Alberta will be facing another year of recession, contracting by 2 per cent this year.

Saskatchewan will manage to crawl out of recession this year but its economy remains weak as only 0.2 per cent in real GDP growth is expected. The province's mining sector continues to suffer from lower oil, uranium, and potash prices, while the job market has been shedding jobs and consumers are reluctant to open their wallets.

New Brunswick's economy is expected to contract by 0.4 per cent this year. The unexpected shutdown of the Piccadilly potash mine is wiping out potash mining and providing a significant blow to the province's mining sector.

Along with the downturn in the resources sector, Newfoundland and Labrador is facing tax hikes and government cuts that will considerably dampen the economic outlook over the next two years. The province's economy is forecast to expand by only 0.2 per cent in 2016 and is expected to face recession in 2017.

The Provincial Outlook: Spring 2016 is available via the Conference Board's e-Library.

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SOURCE Conference Board of Canada

For further information: Yvonne Squires, Media Relations, The Conference Board of Canada, Tel.: [phone] ext. 221, E-mail: [email protected]; or: Juline Ranger, Director of Communications, The Conference Board of Canada, Tel.: [phone] ext. 431, E-mail: [email protected]