RBC Economics is forecasting B.C.’s economic “mixed performance” of 2011 will continue in 2012, according to a report released this morning.
“We’ve got some good news and some bad news,” said RBC senior chief economist Robert Hogue. “It’s kind of a mixed bag this year and when we look into next year and the year after, it’s unlikely that things are going to change that much. The net effect is fairly modest growth overall.”
RBC Economics Provincial Outlook forecasts that B.C.’s real GDP will grow by 2.1% in 2011 and 2.3% in 2012.
The report describes a mixed performance in B.C.’s economy and comments that “for every encouraging sign, there is another that disappoints.”
“For instance, the province’s exporters are in the midst of an impressive push into non-traditional markets such as China, yet they continue to tread water, at best, in the U.S. market,” the report states.
“At home, mildly positive trends in the labour market appear to have been largely ignored by consumers and homebuyers who display a high degree of caution. Businesses, on the other hand, feel confident enough to boost their spending on non-residential capital items, but governments are now retrenching and cutting their own capital expenditures.”
Hogue said RBC is expecting B.C.’s mixed performance to continue, but it’s expecting anticipating rates to improve slightly in 2012 and again in 2013.
“The main factor there is we’re expecting the U.S. economy to gain some strength going forward,” he said.
“There’s still lots of obstacles, but we think that the U.S. economy is going to overcome them and post slightly stronger growth going forward. So that means that U.S. demand for B.C. products is going to improve a bit going forward.”
Nationally, the report found that all provinces “remain largely on course.” But it notes that provincial performance is quite varied, with Saskatchewan, Alberta and Newfoundland and Labrador “firing on all cylinders,” while New Brunswick, Nova Scotia and Quebec appear “stuck in low gear.”
Jenny Wagler
@JennyWagler_BIV