Economic uncertainity hangs over the heads of British Columbians these days with nearly half saying their number one focus over the next year will be to slash debt.
This is according to a Royal Bank of Canada (RBC) Canadian Outlook Index released Friday that indicated residents here have the least amount of confidence in the economy when compared with the rest of the country.
According to the index, residents’ economic confidence dropped 12% since the last quarter to 53%, well below the national average of 60%.
The feeling carries over to the province’s economic outlook index as well, RBC said, which dropped from 96 in June to 87.
Forty-nine per cent of B.C. residents plan to focus on reducing their debt in the next 12 months and 54% say they need to do a better job of focusing on their debt levels.
RBC B.C. regional president Graham MacLachlan said, “B.C. residents have begun to feel the pinch of the economy and, naturally, are focusing on paying down debt."
As well, only 17% of British Columbians believe the local economy will improve over the next quarter, representing a 7% drop since June’s outlook.
The news comes a day after Statistics Canada reported the country’s GDP fell behind in July for the first time in nearly a year (See “Canadian GDP declines for first time since August 2009: StatsCan ” – BIV Business Today, September 30).
In a speech Thursday, Bank of Canada governor Mark Carney said that although the country’s economic recovery has been better than its G-7 peers, its speed has diminished in recent months.
“A modest pace of growth can be expected in coming months as our economy faces considerable headwinds from both the external sector and the limits of household balance sheets,” Carney said.
Despite the grim outlook, RBC said the economy in Canada’s western-most province is holding its own.
“British Columbia’s economy is holding its ground with a projected growth rate of 3.3% in 2010,” said Craig Wright, RBC’s senior vice-president and chief economist. “While some sectors are likely to come under pressure later this year, fairly solid forward momentum will be maintained.”