New BC Economic Outlook Report 2018 – 2020
The report covers regional and provincial economic and population growth, employment and residential investment.
BRITISH COLUMBIA, November 20, 2018 – Northern BC’s economy is set to boom in 2019 and 2020, as economic fortune shifts from the rest of the province to the north, according to the latest Central 1 Credit Union (Central 1) forecast.
According to Central 1’s Deputy Chief Economist Bryan Yu, the construction of the LNG Canada’s Liquefied Natural Gas (LNG) plant in Kitimat and the pipelines that link it to northeast BC will lift the construction cycle over the forecast period. The LNG project will trigger growth in non-residential construction, housing sales and construction, regional spending, and employment opportunities. This will offset some drag from a slowing global growth environment.
BC’s employment growth will be led by the North Coast & Nechako and Cariboo, with growth constrained only by a lack of skilled workers in the local labour market. A pick up in the Northeast B.C. region is expected to emerge later when drilling picks up to facilitate LNG exports.
“Skilled workers will need to be drawn from various BC communities to fulfill LNG project employment in the northern interior,” Yu said.
While northern BC booms, the rest of the province will slow, following a robust period of expansion.
BC’s Gross Domestic Product (GDP) is expected to slip to average about 2.7 per cent from 2018 to 2020 after averaging more than 3.0 per cent over the past two years.
“The deceleration in growth in BC is largely driven by lower levels of housing market activity, reflecting the effects of rising interest rates, the federal mortgage ‘stress tests’ and the provincial government tax policies,” said Yu. “Decreased purchasing power due to federal measures has curtailed housing demand significantly, impacting larger urban markets.”
South Coast regions will experience slower growth following multiple years of robust expansion, due mostly to the weaker housing cycle, while other growth drivers such as a tourism and consumer demand slow. Southern interior regions such as the Okanagan will experience similar headwinds, alongside constrained housing demand from Alberta.
The Lower Mainland-Southwest will be the main drag on provincial employment growth reflecting a combination of slower housing construction, and labour and skills shortages.
“Employment in regions such as Vancouver Island and the Lower Mainland-Southwest are the anchors keeping the average provincial unemployment rate below five per cent. Workers can expect to benefit from wage inflation driven by the tight labour market; though population growth and international immigration will provide some relief to the labour shortages,” said Yu.
Average unemployment rates are above six per cent outside the South Coast region and are predicted to ease over the forecast period.
Highlights from the report:
- Northern BC’s economic fortune is set to boom with the construction of the Liquefied Natural Gas (LNG) plant in Kitimat and the pipelines that link it to northeast BC
- Employment growth is led by BC’s northern communities, specifically: North Coast, Nechako and Cariboo
- Labour and skill shortages highlight the need to attract skilled workers from outside northern areas and likely through immigration.
- Subdued housing market performance to continue on policy measures and credit environment contributing to slower consumer demand
- Unemployment rate expected to remain below five per cent provincially with Vancouver Island and Lower Mainland-Southwest being the main anchors
Read the full report: BC Economic Outlook Report
About Central 1
Central 1 is a preferred partner for financial, digital banking and payment products and services – fuelling the success of businesses across Canada. With $19.5 billion in assets, we leverage our scale, strength and expertise to power progress for more than 300 credit unions and other financial institutions, enhancing the financial well-being of more than 3.4 million. For more information, visit www.central1.com.
Contacts
Laura McIntyre
Member & External Communications Manager
Central 1 Credit Union
T 604.737.6814 or 1.800.661.6813 ext. 6814
E communications@central1.com
Bryan Yu
Deputy Chief Economist
Central 1 Credit Union
T 604.742.5346 or 1.800.661.6813 ext. 5346
E byu@central1.com
