What happened: The Business Council of B.C. expects growth within the provincial economy to slow compared with its last forecast
Why it matters: While the country has the country’s lowest unemployment, the economy is being hampered by challenges facing forestry and retail
Expect the B.C. economy to ease off the gas pedal this year a little more than what was originally expected.
The Business Council of B.C. (BCBC) has downgraded its forecast for province’s economy by two ticks with real GDP growth now expected to expand by 2% in 2020.
In its latest outlook, released February 5, the BCBC pointed to “extreme economic challenges facing forestry” and “essentially flat” retail sales over the past two years as two of the leading factors in the downgrade.
Job growth has also softened over the past year, with the province posting losses the past six out of seven months.
The unemployment rate stands at 4.8% as of December — the lowest in Canada — ahead of January job numbers expected to be released Friday (February 7).
But the BCBC expects the jobless rate to increase to 4.9% in 2020.
Ken Peacock, the council’s chief economist, said external factors have continued to play a role in the economic slowdown since the BCBC’s last outlook.
“B.C.’s exports have declined, and the residential housing sector continues to adjust to policy changes in Canada and China over the last few years. We see growth in several sectors, but overall we look for softer growth in 2020,” he said in a statement.
While forestry represents the province’s leading export industry, it’s currently dealing with ongoing labour disputes, mill closures and a steep decline in jobs.
The council acknowledged that the partial resolution of the U.S.-China trade conflict is positive for global trade and Canada, but it would likely not have a notable impact on B.C. exporters in the near-term.
International merchandise exports fell 6.7% through the first 11 months of last year.
But the council pointed to some bright spots for the economy, noting that the film and TV sector have grown at a “head-spinning clip” of 27% from 2015-18 (an average annual rate).