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. "Conditions remain difficult in the mining sector but strength in forestry, construction, transportation and the real estate industry put the province in an enviable position as Canada's economic growth leader."
- 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.
- Close to 50,000 jobs are expected to be created in the province in 2016 and 2017.
- 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.
One of the main drivers of growth in the economy remains the housing sector as housing starts are forecast to expand at a double digit pace in 2016. While housing starts are forecast to retreat somewhat in 2017, they will remain at high levels and continue to support economic activity in the province. The ongoing strength in the housing market is due to a number of factors including low interest rates, which aren't expected to increase until sometime in 2017, and the fact that the expanding economy is attracting job seekers from the rest of Canada, including the struggling province of Alberta, and also foreign buyers. Rapid price growth in the housing market has increased the risk of a correction mainly because of deteriorating affordability for most income earners in the province.
The province's manufacturing sector will benefit from the weaker Canadian dollar and the Seaspan Shipyards' multi-billion-dollar contract to build non-combat vessels under the National Shipbuilding Program in Vancouver. While the loonie is expected to appreciate somewhat over the near term, it will remain at competitive levels that will boost export demand from the key U.S. market.
The low value of the Canadian dollar will also attract visitors from the U.S. and key Asian markets including Japan and, to a lesser extent, China. Since the loonie started to depreciate towards the latter part of 2013, the number of foreign visitors to B.C. has increased by around 20 per cent.
The strength of the economy will lead to solid increases in employment and keep the unemployment rate well below the national average. Close to 50,000 jobs are expected to be created in the province in 2016 and 2017.
The Provincial Outlook: Spring 2016 is available via the Conference Board's e-Library.
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SOURCE Conference Board of Canada
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