Canada’s post-recession economic recovery is maturing with B.C. taking the lead among the provinces when it comes to growth, according to a recent forecast by TD Economics.
According to TD Bank Financial Group chief economist Craig Alexander, B.C. is expected to have a growth rate above 2% in 2011 compared with a 2% average in the rest of the country.
Alexander told BIV, “The B.C. economy has more momentum than parts of the rest of the country. We had a good run up in commodity prices and they provided additional support to Western Canada."
But there are challenges ahead, he said.
TD believes weaker prospects for the U.S. economy, softness in the Canadian housing market, a fatigued Canadian consumer and waning benefits from stimulus measures could constrain the nation’s economic gains in the near term.
But the stars have aligned for the Canadian business community to avoid a double-dip, he added.
TD expects the Canadian dollar to close in on parity with the U.S. greenback over the next year and that, coupled with good balance sheets, rising earnings and low interest rates, will create the perfect environment for Canadian businesses to reinvest in equipment and machinery.
“We have our fingers crossed that this really does play out because the number one leading problem Canada has today on the economic front is weak productivity … we need businesses to be more innovative in terms of implementing new technologies.”