BCBC recaps the weekly business and economic news stories from the week ending August 21 relevant to British Columbia's economy.
1. Falling oil, falling markets, negative outlook for the global economy
The price of a barrel of oil dropped $1.30 from the start of the day to land briefly below $40 a barrel before climbing back over $40.40 at the end of North America’s business day. This six year low, combined with increased instability in the Chinese markets, contributed to the DOW’s worst week since 2011, closing out the day 531 points down.
Track oil prices in real time here.
Read more about the drop in markets here.
Concern for the global economy was outlined by the Daily Telegraph earlier in the week providing eight signs a global market crash is imminent. With the Chinese slowdown, commodity price collapse and resource price crisis all taking the first three spots on the list, there is little sign that the Canadian economy will bounce back any time soon from its current slump. Click here to read all eight signs.
2. Home prices in British Columbia continue to rise
This week, RBC released their Canadian Home Resale and Price Forecast. While prices are expected to continue to increase for the balance of 2015, RBC anticipates that the Bank of Canada will make a move to increase the overnight rate by 75 basis points to 1.25% mid-2016 contributing to a slow down in price increases. The report forecasts the average home sale price in British Columbia for 2015 will increase by 7.8% over last year’s average to $595,200. Click here to read more in Business in Vancouver.
3. Provinces move forward in developing climate plans
August 17th was the final day for British Columbians to contribute to the province’s Climate Leadership Plan via the online survey, however written submissions will continue to be accepted until September 14th. You can find more about BC’s Climate Leadership Plan, including the discussion paper here, and for a list of steps the provincial government has already taken on climate action, click here.
Meanwhile in Alberta, the new NDP government released their Climate Leadership discussion document earlier this week. The initial direction suggests higher costs and a diminished future for the oil industry – which has the potential to negatively impact the national economy. The online public survey will be open until September 18. Visit their Climate Leadership page for more information.
4. CHART: Canadian cities hold three spots on the list of the top five most ‘liveable’ cities
On Tuesday, the Economist released their annual rankings of the world’s most liveable cities and spots 3,4 and 5 were held by Vancouver, Toronto and Calgary, respectively. The ranking considers 30 factors including health care, safety, education, infrastructure and the environment. The bottom of the list included Kiev, Tripoli and Damascus – not surprisingly due to the significant instability and safety issues. Read more about the report here.
5. Vancouver office space vacancy spikes
Colliers International reports this week that the downtown office vacancy rate in Vancouver is at 10% and rising with an additional 475,000 square feet set to be complete by the end of 2015. While the BC economy is currently a bright spot in Canada, there appears to be no end to the growing glut of office space in downtown Vancouver with seven more office towers proposed to come online in the next 3-10 years. Read more about this story here.