British Columbia is set to take top spot among the Canadian provinces for economic growth both this year and next, according to a BMO Financial Group report released October 6.
The province’s economy will grow by 3.0% this year, which is more than double the 1.2% growth expected nationally, BMO forecasts. In 2017, B.C.’s economy is forecast to grow a further 2.5%, compared with 2.0% nationally.
“This would continue a run of stable and solid growth averaging 2.8% over the past seven years,” BMO said in the report. “The province’s resource base is much more diverse (natural gas, base metals, forestry and little direct exposure to oil), housing has been roaring, while the combination of sturdy U.S. demand and a weaker Canadian dollar are a net positive for exports and tourism.”
The report points out that because B.C. is Canada’s biggest trading partner with Asia, slowing growth in China would hit this province the hardest.
The recently introduced foreign buyers tax is working to soften home sales, especially in the high-end sector, said Robert Kavcic, BMO senior economist.
“On the supply side, housing starts have broken out of the stable range led by a record number of multi-units,” Kavcic said. “Some budding signs of speculation recently, plus this coming wave of condo supply, could be a risk to watch in the year or two ahead.”
BMO forecasts further economic contraction in Alberta in 2016, with GDP shrinking 2.3% this year after decreasing 4.0% in 2015. Next year will see a return to growth for the province, with a 2.3% increase in the cards, according to the report.
@EmmaHampelBIV
