Central 1 Credit Union is forecasting B.C.’s economy will only grow 2.4% in 2011 before a resurgence in private investment, a growth in consumer spending and a stronger global economy leads to 3.3% economic growth in 2012 and 3.6% growth in 2013.
This year’s economic growth is estimated at 3.1% compared with 2% in 2009.
In a report released Monday morning, Central 1 tied the economy’s slower growth forecast for 2011 to the global economic slowdown and the winding down of fiscal stimulus. It also said that not having a boost from the Olympics was a factor.
According to Central 1, the trade deficit will widen right though to 2013. Government spending on goods and services will slow at least until then with infrastructure spending in particular declining in 2011 and 2012.
Central 1’s forecast should be of some comfort to British Columbians, who are apparently a pessimistic lot. BIV reported October 1 that residents of the province have the least amount of confidence in the economy in Canada (See “Economic confidence in B.C. lagging behind rest of Canada: RBC ” – BIV Business Today, October 1).
Domestic sectors will continue driving economic growth in B.C., although part of Central 1’s forecasted resurgence in private investment is based on improving external markets for energy and mining products.
Central 1 noted several major pipeline and mining projects are assumed to begin later in the forecast period.
According to the credit union, resource extraction and processing, construction and industries driven by consumer spending will have the highest growth rates.
Although it will remain well below pre-recession levels in 2013, forestry and wood manufacturing will improve from its recession lows, Central 1 said. New resource supplies will help revive the mining sector.
Major projects and ongoing gains in residential activity will keep the construction sector growing at an above-average pace.