RBC is forecasting that B.C. will grow by only 2.1% in 2011 – a reduction from the bank’s earlier forecast of 2.6%.
Also in the RBC Provincial Economic Outlook released this morning, the bank revised downward its growth predictions for B.C. in 2012 to 2.3% from 3%.
“We remain confident that the pace of activity in British Columbia’s economy will pick up during the second half of 2011 alongside strengthening U.S. and Canadian economies,” Craig Wright, RBC senior vice-president and chief economist, said in a press release.
“However the rate of overall growth this year is now projected to be slower than previously forecasted.”
The forecast noted:
-a “dramatic” 50% year-over-year increase in B.C.’s exports to China so far this year;
-a 35% increase in exports to South Korea;
-a 40% increase in exports to Taiwan; and
-“significant" inroads in exports to China by B.C.’s wood product producers.
However, the outlook also underlined that other industrial sectors in the province, including metal production and mineral and mining operations, experienced output declines in the early part of 2011.
The outlook noted that the employment picture in B.C. has improved recently since the unemployment hit an eight-year-high of 8.8% in February.
It noted, however, that that the setback on the jobs front has likely been a factor in restricting retail sales growth in the province to the slowest levels in the country for the first half of the year.
The outlook, which describes Canada’s provincial economies as “bruised,” lowered the bank’s growth expectations in all provinces but Saskatchewan for this year, and for all provinces except Manitoba and Alberta for 2012.
Jenny Wagler
Twitter: JennyWagler_BIV