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Forecast Remains Bright for BC Economy
Friday, October 13, 2006
British Columbia's economy remains strong with expected growth of 4.8 per cent in 2006 and 3.7 per cent in 2007, according to a provincial economic outlook released today by RBC.
"B.C. will remain among Canada's top growth leaders this year and into the next despite existing economic risks to growth," said Craig Wright, vice-president and chief economist, RBC. "While there are parallels to economic conditions during the mid-1990s when housing markets were cooling amidst a softening U.S. economy and high commodity prices, we forecast that the risks are more manageable this time around."
RBC notes that the B.C. economy is sufficiently strong to withstand housing weakness and continues to grow. The commodity price cycle will cool, but prices should remain high enough to stimulate exploration and development. Meanwhile, the province's housing markets are likely to soften gradually, while provincial in-migration remains strong.
"This kind of news is always good for the construction industry," said Mark Green, VP of Operations for BCdex, the BC Construction & Landscaping Network. "People are continually moving into the province to fill positions required by the growing economy," Green added, "and new housing accomodations have to be constructed to handle the influx."
According to the RBC report, numerous strengths provide a firm backdrop for the overall B.C economy. First, the Vancouver 2010 Olympic and Paralympic Winter Games represent a multi-year stimulus to the regional economy for at least the next five years. In addition, the strength of the gas fields in the Greater Sierra and Cutbank Ridge regions, solid international trade, the thriving high tech industry and sharp improvements to the B.C. government's finances all complement B.C.'s overall growth. "Add it all up, and we think the B.C. economy can continue to nip at Alberta's heels, along with Newfoundland and Labrador, as one of the provincial growth leaders this year and next," said Wright.
For the overall Canadian economy, RBC has revised its 2006 growth forecasts downward with Ontario being sharply downgraded to last place among the provinces. Alberta and British Columbia are now in first and second place respectively, bumping Newfoundland and Labrador to third place for growth in 2006.