While B.C.’s economy cooled in 2011 and is forecast to slow further in 2012, Asian demand will keep the provincial economy growing faster than the national average, according to a BMO Economics report.
The Provincial Monitor found that, “barring a deeper global downturn, growth should be supported by strong, though slowing, Asian export demand and resource-sector investment.”
BMO is forecasting that B.C.’s GDP will grow 2.4% this year and 2.3% in 2012.
The forecast lowers the 2.6% 2011 growth BMO was predicting in October – already a reduction from what the bank was forecasting this past spring. (See “BMO lowers 2011 growth predictions for B.C.”– BIV Business Today, October 12.)
The bank’s just-released report noted that B.C.’s labour market has improved since the beginning of the year, with unemployment down to 7% from February’s 8.8%.
But the report also points to indicators that Vancouver’s “white-hot” housing market is cooling. Despite an increase in housing sales in October, sales in the city were 1% below levels a year ago. It also noted housing prices have declined from above $800,000 in June to $758,000 now, in part due to fewer high-end sales.
B.C.’s vote to revert to PST/GST “appears to be having a negative impact on the new home market,” the report states.
BMO is predicting B.C. housing starts will diminish to 23,000 in 2012 from an anticipated 36,500 in 2011.
Requests to BMO for comment were not returned by press deadline.
Jenny Wagler
@JennyWagler_BIV