Get set for British Columbia to lead the country in economic growth in 2016 and 2017, according to the Conference Board of Canada latest quarterly Provincial Outlook, released December 7.
B.C. will be the only province to see growth over 3% this year and next, the board said in its report, with real GDP increasing 3.1% in 2015 and 3.6% in 2016. The biggest driver will be the construction industry, the report said.
“Housing starts will reach 33,000 units this year and are expected to remain at similar levels in 2016,” the board said in a release.
“B.C.’s construction industry is poised to advance strongly over the near term.”
Vancouver’s real estate sector will continue to grow, with foreign buyers boosting both prices and the number of transactions for single-detached home sales.
The housing market will also be supported by strength in the finance and insurance sector, which is expected to grow 6% this year and 3.3% in 2016. Strong home sales will drive sales of appliances and garden equipment. Overall retail sales are expected to grow 6.6% this year, with strong growth continuing for at least the next four years.
A strong labour market, with job creation remaining steady in 2016 and 2017, will also boost consumer spending.
Manufacturing in the province is forecast to grow 4.2% in 2015 and around 2% for each of the next five years.
“Wood product manufacturing will get a boost this year from healthy U.S. home construction, while production of the non-combat vessels for the federal government is expected to ramp up at the Seaspan Shipyards in Vancouver,” the report said.
The forecast includes approval of the $36 billion Petronas LNG project.
Marie-Christine Bernard, the Conference Board’s associate director, provincial forecast, said this investment could get underway if all conditions are met.
“This would be a game-changer for the province, providing a considerable boost to the economy,” she said.
The Conference Board is not alone in predicting B.C. will outshine the rest of the country next year. A CIBC World Markets report released November 23 also placed the province in the number one spot in 2016, with a slightly less robust forecast of 2.8% economic growth.
In May, BMO also forecast the province will lead growth across the country, pointing out this will be the first time in a decade B.C. will overtake the other provinces. A month later, Central 1 Credit Union released a similar report.
(Please note: a previous version of this story had contained an error that valued the Petronas project at $36m. This has been corrected to read $36b.)
