British Columbia is expected to be the only province to advance by more than 3 per cent this year, according to The Conference Board of Canada’s Provincial Outlook: Spring 2015. Following growth of 2.6 per cent in 2014, the province’s economy will grow by 3.1 per cent in this year and 2.7 per cent in 2016.
“While some Western provinces are grappling with weak economic conditions, British Columbia is enjoying a period of strong growth. On the heels of a solid economic performance last year, BC is positioned to be the fastest-growing provincial economy this year,” says Marie-Christine Bernard, associate director, provincial forecast. “The province’s economy will remain strong in 2016, outpacing the national economy.”
Many of British Columbia’s service industries, as well as manufacturing, are performing well, according to the report. Exports were up in the first months of the year and should remain strong, as the province’s main trading partners continue to perform well. The province’s housing markets, both new and resale, remain in good shape. In fact, Vancouver’s resale market is the hottest in Canada, with solid demand and price increases so far this year. The strong performance of the housing market is supporting the finance, insurance, and real estate industry, while the strength in exports is fuelling wholesaling and transportation and warehousing.
While the forecast is generally positive, there are risks to the outlook. Job creation has been muted so far this year, and if this persists over the summer months it could hurt consumer confidence and the domestic economy. In addition, there remains considerable uncertainty surrounding the development of the liquefied natural gas (LNG) industry in the province, due to lower LNG prices in Asian markets. A long-awaited decision by Petronas and its partners on whether to move forward with a $36-billion project is expected this year. If it proceeds, it would be a game changer for British Columbia’s energy sector.