Natural resources are going to be the driving force behind B.C.’s economy next year, according to an RBC Economics report published Wednesday.
Craig Wright, RBC’s senior vice-president and chief economist, said an improved outlook for some of the key commodities produced in B.C. will continue to support overall growth.
But the end of government stimulus programs and a cooling housing market could restrain growth somewhat, Wright added.
“2011 will see a maturing of the recovery in British Columbia and the conclusion of some of the measures, such as increased infrastructure spending, that had been put into place to combat the recession,” Wright said.
RBC predicts the province’s real GDP will grow 2.9% next year, down from 3.1% this year, and employment will rise only 1.9% in 2011 compared with 2.1% this year.
That translates into 20,000 fewer new jobs next year.
Despite strength in metals and minerals, Wright doesn’t believe forest product producers are likely to enjoy a major turnaround next year as improvements to the U.S. housing market continue to lag.
Still, the province’s mining sector is enjoying what some have called a “renaissance,” built on soaring commodity prices, a flurry of takeovers and investments and a slate of new mines expected to begin production in a few years.
In a recent interview, John Winter, president and CEO of the BC Chamber of Commerce, said B.C.’s renewed focus on its most historic sectors is in part attributable to outgoing premier Gordon Campbell.
“I think we’re more able to survive the ups and downs because of the inherent strength in our economy, and I think [there’s] recognition of what our economy is really driven by and it’s exports, it’s not driven by small sectors of our economy it’s exports of resources.”