WATCH: A new report has some good news for BC’s economy this year. Ted Chernecki reports.
A new report says economic growth in British Columbia will be “modest” this year, but going forward will be more than twice as strong as the national average.
The report, written by Central 1 Credit Union, says low interest rates and a low Canadian dollar will underpin modest economic growth in B.C. this year. However, increased demand in the export-oriented goods and services sectors will drive growth in 2016 and 2017.
“We’re expecting for the broader economy really being set by a tourism sector, as well as other exchange rate sectors like manufacturing. Housing will also be a driver due to the low exchange rates,” says Bryan Yu, Senior Economist with Central 1.
“What that means for the Lower Mainland is essentially that area should be a key driver for the overall provincial economy.”
Overall, they predict the economy will grow by 2.7 per cent this year, compared to 1.2 per cent for the rest of the country.
An optimistic forecast
This forecast for B.C. comes at a time when the Canadian economy is taking a hit due in part to declining oil prices.
With Alberta’s newer production facilities in the oil sands requiring oil prices to be approximately $70 per barrel to turn a profit – and the current price being closer to $40 – the national numbers make our economy look a lot worse than it actually is.
READ MORE: As crude drops, oilpatch towns feel the pinch
“I think for B.C., just due to the fact that we aren’t that exposed to the negative impacts of that oil, we are faring pretty well compared to the rest of Canada.” said Yu.
B.C’s unemployment rate is also predicted to decrease from a 6.6 per cent in 2013 to a 5.7 per cent in 2017.
Not all positive
According to Yu, the forestry sector is also expected to see some growth due to U.S. housing demand.
However, there are concerns about the province being able to meet that demand.
“Because of the mountain pine beetle epidemic that we have seen over the past decade, it is going to limit a lot of the growth and supply that’s available in the northern communities in B.C.” said Yu.
READ MORE: Hundreds of workers looking for jobs after two mill closures in central B.C.
The report also predicts that the population of southwest B.C. will go up from 2.9 million to almost 3 million by 2017.
As a result, the report also predicts the Lower Mainland’s median housing prices will go up about 21 percent in the next two years .
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