While Edmonton and Calgary face a recession in 2015 due to the crash in crude prices, Vancouver’s economy is expected to thrive this year, according to the Conference Board of Canada.
The city, along with Toronto and Halifax, is expected to be one of the country’s top performers. The Conference Board expects Vancouver’s gross domestic product (GDP) to grow by 3.1% this year and 3.2% in 2016, after expanding 3.7% in 2014.
“Vancouver’s economy grew by an average of 3.3% over the past five years,” said Alan Arcand, associate director for the board’s centre for municipal studies.
“Widespread gains across all sectors of the economy will lead to continued healthy growth over the next two years.”
The future of the city’s manufacturing sector – which has grown by 3.4% annually between 2010 and 2014 – looks bright, due in large part to Seaspan’s $8 billion shipbuilding contract with the federal government.
“Work at Seaspan’s North Vancouver site is expected to hit full production this year, raising manufacturing output by an additional 4.8%,” the Conference Board said in a report.
The recovering U.S. economy and low Canadian dollar are also expected to boost the sector this year.
In 2016, manufacturing is expected to expand 4.2% and then increase by 3% annually in subsequent years.
Vancouver’s construction sector shrank 0.7% in 2014, but this trend is expected to reverse in 2015 as the number of housing starts in the region jumped last year, with single-detached home starts increasing more than 9%. Starts are expected to increase 3.4% in 2015 and 3.2% in 2016.
The low Canadian dollar will also boost this sector, and as the population in the region grows steadily and the employment market strengthens, the demand for new homes will increase. As well, foreign investment in Vancouver real estate is expected to remain high.
Non-residential real estate will also grow over the year, the board forecasts. Mixed-use building construction will add more than 2 million square feet to the pool of office space in the city. The Trump International Hotel and Tower, the Marine Gateway development and Telus Garden are examples of some projects currently underway.
Wholesale and retail trade are forecast to grow 4.9% this year. This is due to continuing growth in employment and subsequent increases in consumer spending.
The outlook across the province as a whole is also positive, with expected growth of 3% this year – the highest in the country.
“The outlook for next year is bullish as well, with real GDP forecast to advance by 2.7%,” the board said in its report.
“The growth will be led by a number of industries that will benefit from the stronger U.S. economy, the lower Canadian dollar and increasingly upbeat consumers.”
Canada-wide, GDP is expected to grow steadily, except for in Calgary, Edmonton, Saskatoon and Regina.