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B.C.’s economy to grow at slower pace over next two years, says new forecast by Central 1 Credit Union

Housing market will no longer be main driver of growth

VANCOUVER, British Columbia — The B.C. economy is slowing from last year’s torrid pace, but will remain on strong footing through 2019, says a new forecast by Central 1 Credit Union (Central 1).

“Household demand will remain the backbone of economic growth, but we will see further rotation towards government spending, trade and an increase in investment, as the contribution from the housing sector diminishes,” said Bryan Yu, senior economist at Central 1. “Government spending and higher commodity prices are expected to pick up the slack, but the important forestry sector faces potential softwood lumber tariffs.”

Highlights:

  • After last year’s 3.8 per cent expansion, GDP growth will dip to 2.3 per cent this year, before rebounding to 2.7 per cent in 2018 and 2019.
  • Provincial growth will continue to fare well compared to othe provinces and exceed the national growth rate over the period.
  • Housing starts decline 13 per cent in 2017 following a 33 per cent surge in 2016.
  • Employment’s modest growth pace will lower the unemployment rate to near five per cent by the end of 2019,  contributing to upward pressure on wages.
  • A low Canadian dollar will continue to drive goods and services exports higher.
  • The ongoing softwood lumber trade negotiations are a risk for the sector and will likely drag on growth after a moderate 2016 performance.

“Consistent with our previous forecasts we do not expect a major northern liquefied natural gas (LNG) project in the short term,” Yu said. “Low global gas prices and substantial supply mean B.C. won’t be back in the running for such an investment until the 2020s.”

Yu says the tight labour market and stronger commodity prices will contribute to a rise in overall price levels. Consumer prices will climb about two per cent this year and 1.8 per cent thereafter.

Read the full report: B.C. Economic Forecast 2017-2019.

About Central 1

With offices in Vancouver, Mississauga and Toronto, Central 1 holds on balance sheet approximately $17.3 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 70 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 $116.8 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