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Economic outlook credits major projects in B.C. for continued growth: Central 1

VANCOUVER — A financial services organization in British Columbia is forecasting modest but slower growth for the province through 2022.

Central 1 says economic growth in B.C. should remain just above two per cent over the next 28 months.

Its report released Thursday says the growing economy is supported by a strong labour market, healthy construction industry and ongoing work on the Site C hydroelectric project, liquefied natural gas development in Kitimat and the twinning of the Trans Mountain pipeline.

But Central 1 says global trade uncertainty and a dip in new home construction will be among factors that dampen growth.

The forecast says economic growth in B.C. slipped from 2.4 per cent in 2018 to 2.2 per cent this year, but should rebound to 2.6 per cent by 2020 as major construction projects proceed.

Growth is expected to edge down to 2.1 per cent in 2021 and 2.2 per cent the following year, in part because Central 1 says recent housing market skids mean fewer apartment starts, while a weaker forestry sector and global trade concerns contribute to the sluggish outlook.

Central 1 is a service provider for credit unions in B.C. and Ontario as well as other financial institutions across the country

The report highlights job growth in B.C. as one of the brightest aspects of the economic outlook, noting annual labour force employment growth is forecast to average 2.7 per cent.

With the exception of resource sectors such as forestry, “there aren’t many holes to poke in the current labour market picture,” says the report, although it forecasts employment growth will slip to near one per cent through 2022.

It blames the dip on dwindling jobs in the manufacturing and construction industries over the next two years, but Central 1 economists forecast service sector employment in areas such as technology, tourism and health care should pick up some of the slack.

“Labour force participation rates are elevated suggesting the tight market is attracting people into the workforce while others delay their potential retirement,” the report says.

British Columbia’s unemployment rate is tracking at 4.6 per cent, which Central 1 says is a near historic low that has not been seen since just before the financial crisis of 2008 and 2009. 

Stronger economic conditions compared with Alberta, as well as ongoing demand for workers on major projects will continue to fuel interprovincial migration from about 3,400 people this year to 12,000 by 2020, Central 1 says.

Overall, B.C.’s population will expand by 1.2 per cent in 2019 says the report, crediting international immigration as the main reason for population gains over the coming years.

“From 2019 through 2021, B.C. is forecast to grow by an average of nearly 60,000 persons annually providing a significant source of consumer and housing demand,” it says.

Beth Leighton, The Canadian Press

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