The COVID-19 pandemic to date has caused over 33 million infections and 1 million fatalities worldwide. It has also precipitated the most severe global GDP contraction of the post-war era. The OECD estimates that the cost of the pandemic in terms of lost income worldwide could reach USD 7 trillion by the end of 2021 – equivalent to a year’s worth of output of France and Germany combined.
Global GDP growth is expected to be -4.5% in 2020 and 5.0% in 2021. Canadian GDP is expected to be ‑5.8% in 2020 and 4.0% in 2021. Against this backdrop, we expect the B.C. economy will shrink by 7.5% in 2020. This is a slight improvement from the previous projection, reflecting a stronger-than-anticipated improvement in consumer spending. In 2021, the B.C. economy should grow by 4.5%, slightly ahead of Canada.
Employment losses by industry can be grouped into three categories – “hard-hit”, “moderately impacted”, and “limited impact” industries. Segmenting industries in this manner helps conceptualize why we expect the employment recovery process to be bumpy and uneven.
By region, Metro Vancouver experienced B.C.’s steepest job losses because of its industrial and employment mix. Consumer-facing industries have been hammered and have an over-sized presence in the Lower Mainland. By contrast, manufacturing, forestry, mining, oil and gas, and agriculture have regained all of the jobs lost since February – and then some. These industries are over-represented in non-metropolitan regions of B.C.
Overall, we expect employment in B.C. will grind higher but not fully recover during the forecast period.