A tale of 10 cities provides a cautionary outlook for Vancouver.
It comes in the form of two Oxford Economics briefings released in late 2019. The global economic forecasting and analytics company’s 2020-21 outlook for the world’s 900 major cities noted that 586 will experience slower annual growth than they have over the past five years.
It also noted that the West Coast, whose cities have been outpacing many of their North American counterparts, will begin to lose their performance edge.
Reasons for that slowdown are many. But key among them is the projected deceleration in global trade, which will hurt cities that have manufacturing-intensive economies. That slowdown, in turn, will weaken demand for traded services.
Manufacturing and services are fundamental to urban economies, and port transportation and trade are fundamental to Vancouver and other major West Coast ports.
Among the observations in Oxford Economics’ companion report on paths to success for America’s 10 largest metro areas is the importance of combining favourable industrial structures with a highly skilled workforce and high value-added businesses. The combination is best exemplified by San Francisco, which the report predicts will be the most successful major U.S. metro area from 2019 to 2023. The city’s labour and property costs are high, but it excels as a tech hub with a diverse economy and workforce in a region with a reputation for a good quality of life.
Vancouver shares some of San Francisco’s attributes, but a downbound affordability factor coupled with falling house prices in an economy largely dependent on real estate prices is dampening its growth prospects.
Oxford Economics points out, for example, that Vancouver’s annual GDP growth dropped to 2.1% in 2018-19 from 4.1% during the 2014-17 period as high costs of living slowed growth all along the West Coast.
The cautionary tale the region’s cities share, as Oxford Economics notes, is this: competitive advantages should not be taken for granted because they don’t last forever.