B.C.’s economy will pick up steam in 2013, Central 1 Credit Union predicts in a new economic forecast.
Economic growth in 2012 slowed, but is expected to pick up steam, thanks to headwinds coming out of the U.S.
“The U.S. is expected to gain speed during 2014 to 2017, which will help lift B.C.'s economy to higher growth rates after 2013,” said Helmut Pastrick, chief economist for Central 1.
“Domestic developments will also shape the province's economy and, in particular, the reversion to the provincial sales tax (PST) system from the harmonized sales tax (HST) will lift consumer spending and provide some inflation relief, though this will add business costs.”
B.C.’s economic growth slowed to 1.9% in 2013. The new forecast is for growth of 2.2% this year, ramping up to 2.8% in 2014, and hitting 3.7% between 2015 and 2017.
“The housing slowdown this year will reduce residential investment,” Pastrick said.
“The mild correction in the housing market will pull down economic growth in 2013 and 2014. Fewer housing starts in 2013 are a near certainty in an environment of declining housing sales and prices."
The unemployment rate is projected to steadily fall to below 5% by 2016, and 4% in 2017. That should have upward pressure on wages, Pastrick said.