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B.C. economic growth to shrink in half in 2023 as inflation, labour woes take toll: Deloitte

GDP growth to plummet from 3.5% to 1.7% between 2022 and 2023
Construction crews at work on a project in Vancouver | Chung Chow, BIV

B.C. won’t be able to escape the effects of record inflation, rapid rate-hikes and acute labour shortages in the coming year, according to Deloitte Canada.

The business services firm’s latest economic forecast sees West Coast GDP growth plummeting from 3.5 per cent this year to 1.7 per cent in 2023.

“British Columbia's near-term economic outlook is mixed,” Tuesday’s report said.

“Growth has been strong enough that the province is now running into capacity constraints. In March 2022, the provincial job vacancy rate hit 7.3%, by far the highest among all provinces.”

Statistics Canada data revealed last week the province has only 0.9 unemployed workers for every vacant job, as of the first quarter of 2022. The West Coast faced 149,190 job vacancies during the first three months of the year – up nearly 50 per cent compared with the 100,365 vacancies in the same period in 2021.

Economists at TD Bank said in their own forecast earlier this month that B.C.’s economy is expected to grow 2 per cent next year, down from 4.2 per cent this year.

“Early signs of cooling in the housing market have emerged this spring in parts of Ontario, British Columbia and Quebec,” Robert Hogue and Carrie Freestone said in their June 7 forecast, adding rising interest rates will also ease home resale activity in less active markets.

“Rapidly deteriorating affordability – especially in Canada’s most expensive markets – will make it increasingly difficult to sustain recent property values. In fact, we believe home prices have already reached a tipping point in several markets in Ontario and British Columbia.”

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