BC's Economy Remains on Solid Growth Path Despite Muted Global Backdrop

  • July 21, 2016
Against the backdrop of a subdued global economy, British Columbia looks poised for healthy growth over 2016-17, continuing the pattern of last year. While parts of our economy will be held back by depressed prices for some key commodities, exports of non-resource goods together with many services – including tourism – are enjoying a lift from the low Canadian dollar. The province’s housing market also remains buoyant, supported by rock-bottom interest rates, better job growth and steady inflows of immigrants and foreign money.

Against the backdrop of a subdued global economy, British Columbia looks poised for healthy growth over 2016-17, continuing the pattern of last year. While parts of our economy will be held back by depressed prices for some key commodities, exports of non-resource goods together with many services – including tourism – are enjoying a lift from the low Canadian dollar. The province’s housing market also remains buoyant, supported by rock-bottom interest rates, better job growth and steady inflows of immigrants and foreign money.

Highlights

  • The global economic backdrop remains unsettled. Over the past year forecasts have been scaled back. Global growth is now projected to be around 3% this year and in 2017 as well.
  • Growth projections for many of BC’s key trading partners have also been cut, which, along with mixed commodity prices, is weighing on BC's merchandise exports.
  • The weak dollar and the ongoing expansion in the US are a source of export strength for the province. Tourism and other service exports are benefitting from the lower currency.
  • The domestic side of the BC economy is healthy, led by robust housing activity, large gains in the retail sector and solid job growth.
  • Although job growth in BC is strong, it is concentrated in the southwest part of the province. Other regions have seen employment levels slip over the past year.
  • Net in-migration from other provinces, particularly Alberta, is helping underpin domestic economic activity.
  • In light of the weaker external setting, we have trimmed the outlook for BC's real GDP growth slightly for 2016 to 2.7%. For 2017, we now expect growth to be 2.6% (a reduction of 0.4 percentage points from our previous projection).

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