Some of the province's key growth industries over the next five years will have strong global demand to thank for their success.
Central 1 Credit Union's latest economic forecast for B.C. suggested forestry, wood-products manufacturing, mining, primary metals manufacturing and professional-technical services will be among the economy's fastest growing sectors over the next five years.
It forecast the forestry and wood-products manufacturing sectors to grow 20% between 2012 and 2017 thanks to the expected recovery in the U.S. housing market and renewed construction in China.
B.C.'s mining sector is expected to grow over the next five years with continued mine development in the province, thanks in part to the northwest transmission line, which is expected to be completed this year. The industry will also benefit from the province's newest mine, Thompson Creek Metals' Mount Milligan. The copper-gold mine is slated to start production in 2014.
Primary metals manufacturing is expected to get a major boost in 2015 when Rio Tinto Alcan completes the upgrade and expansion of its Kitimat aluminum smelter. Overall, the economic contribution of the primary metals sector is forecast to grow 25% in 2015.
The demand across Canada for professional and technical expertise based in B.C. is also projected to increase over the next five years.
While the forecast is encouraging, all of these high-paying sectors remain dependent on a fragile global economy. Any slowdown in key commodity markets such as China will weaken the prices of many of B.C.'s key exports, including coal, aluminum and copper.
B.C.'s forestry sector, which has finally started to rebound, could stall if the U.S. economy fails to maintain its growth trajectory, reduce unemployment or address the perilous fiscal situation at all levels of the U.S. government.
A TD Economics report was optimistic about the U.S. housing recovery, but it noted significant challenges remain in reversing the country's plummeting home ownership. In the U.S., foreclosure rates remain above historic levels, and the stream of homeowners looking to become renters is growing rapidly. Rising student debt levels in the U.S. will also constrict home-ownership growth and force more students to live with their parents longer than ever before.
