Amid an improving external backdrop, BC’s economic expansion remains on a healthy course with little on the horizon to suggest this will change over the next couple of years.
- The global economic backdrop has strengthened, with higher commodity prices providing a boost to BC’s export sector.
- Following a strong showing in 2017, growth in the Canadian economy is expected to ease. Still the national economy remains on a solid footing.
- With a rate hike early in the year, the Bank of Canada has resumed its tightening cycle. Additional rate increases are expected.
- The BC economy is poised to downshift in 2018, following another above potential expansion in 2017. Real GDP growth is forecast to rise 2.3% this year, following a 3.1% expansion in 2017.
- Modest interest rate increases and a tightening of mortgage lending standards will act as headwinds for residential real estate activity. Real estate has been a substantial growth driver for the province in recent years so the anticipated downshift will spill over to retail sales and other segments linked to real estate sales and construction.
- BC’s job market remains healthy, although there is some early indication that the pace of job growth is moderating. Some slowing is inevitable as the unusually strong gains earlier in 2017 were not sustainable.
- With both the export sector and domestic activity still expanding, BC’s economy is in good shape. While there are risks to the outlook, there is nothing on the horizon to derail BC’s expansion.