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B.C.’s economy will continue to show regional divisions, says new Central 1 Credit Union forecast

Vancouver, Victoria and Kelowna will lead, while other regions grow slowly

VANCOUVER, B.C.—British Columbia has led the country in economic growth for the past two years and looks to remain on a moderate trend through 2018, but there will be significant regional variations, says the latest economic forecast by Central 1 Credit Union (Central 1).

“Going forward, the economy remains on solid footing,” says Central 1 Senior Economist Bryan Yu. “Economic activity will continue to be underpinned by solid consumer spending, but growth will be curtailed by lower employment growth and weaker housing activity. GDP growth is forecast to fall to a modest 2.3 per cent in 2017 with a rebound thereafter.  Employment growth will ease to 1.1 per cent after a surge this year.”

The report,  B.C. Regional Economic Outlooks, says B.C.’s positive but mixed growth prospects set the stage for continuation of the regional economic divide observed in 2016. The Lower Mainland-Southwest, Vancouver Island and Kelowna will remain the province’s growth drivers.

Victoria and Kelowna will see their red-hot housing markets move back into balance in 2017 and prices will stabilize after strong 2016 gains. Meanwhile, Metro Vancouver is anticipated to show modest declines in median home values of four per cent in 2017.

“In contrast, the economic cycle outside these markets will remain tempered with still challenging conditions in the economy,” Yu said. “Weak commodity-related investment, closer reliance on Alberta’s oil economy and subdued global growth will continue to constrain economic activity.”

“Uncertainty around a new softwood lumber agreement and the likelihood of tariffs is a risk for lumber production and sector investment in B.C.’s interior markets,” Yu added.

Highlights:

  • Vancouver Island will continue to enjoy healthy growth, driven by an expanding population and solid provincial government fiscal position.
  • Lower Mainland-Southwest, centred on Metro Vancouver, will continue to be B.C.’s provincial growth driver, but housing activity will weaken.
  • Thompson-Okanagan has generally positive prospects due to rising population and increasing house prices but growth is concentrated in Kelowna.
  • Kootenay economic region will see mild growth and unemployment stuck about 8 per cent.
  • Cariboo has lost jobs and people in recent years, trends that may stop but not reverse through 2018.
  • North Coast and Nechako will continue to suffer lost population and week employment growth.
  • Northeast will see greater stability after a slump in 2016, but conditions will remain a challenge.

“For the province as a whole through 2018, consumer demand will largely be driven by population growth, which is forecast to remain at a modest 1.2 per cent a year,” Yu said. “International immigration is forecast to rise given higher federal immigration targets, while a relatively stronger economy will continue to attract workers from other regions of the country.”

Read the full report –  B.C. Regional Economic Outlooks

About Central 1

With offices in Vancouver, Mississauga and Toronto, Central 1 holds on balance sheet approximately $16.6 billion in assets. We provide wholesale financial products, trust services, payment processing solutions and direct banking services to almost 300 credit unions and institutional clients from coast to coast.

In addition, Central 1 is the primary liquidity manager, payments provider and trade association for our 42 member credit unions in B.C. and 71 Ontario member credit unions. Our members represent a consumer-oriented, full-service retail financial system that collectively serves 3.3 million members and holds more than $115.7 billion in assets. For more information, visit central1.com.

Contacts

Bryan Yu
Senior Economist
Central 1 Credit Union
T 604.742.5346 or 1.800.661.6813 ext. 5346
E byu@central1.com

Art Chamberlain
Media Relations Manager
Central 1 Credit Union
T 905.282.8534 or 1.800.661.6813 ext. 8534
E achamberlain@central1.com