VANCOUVER – The Business Council of British Columbia says the provincial economy is poised to “downshift” in 2017.
The council’s annual economic review and outlook says the real estate market, consumer spending and exports are slowing, leading to the loss of momentum.
The report forecasts gross domestic product, or the value of goods and services provided, will slow to an average pace of 2.2 per cent for this year, with a similar performance expected for 2018.
The report says the biggest factor is the slowdown in the residential real estate market in Metro Vancouver, which ripples through the wider economy with less demand for services and some retail segments.
The council says the near-certain imposition of stiff U.S. penalties for softwood lumber imports from B.C. also weighs on the province’s exports for 2017 and 2018.
The report says the employment boom won’t be sustained, mostly because labour market conditions are tightening and it would be difficult to repeat 2016’s stellar pace of job creation.
In 2016, B.C. saw the strongest job growth since 1994, with employment up by 73,000, the report noted.
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“The impact of the province’s booming real estate and related construction markets was evident in the labour market data, with 10,000 of these new jobs in the construction sector,” the report says.
It concludes provincial economic growth will become more aligned with the growth expected in other Western provinces.
“Softer conditions across many sectors of the B.C. economy suggests the province will shift from an above average pace of expansion to a slightly below average pace over the next couple of years.”