VANCOUVER, BRITISH COLUMBIA--(Marketwired - Oct. 16, 2014) - Economic growth remains sturdy in British Columbia, with growth running roughly in line with the national average, according to the Provincial Monitor report released today by BMO Economics. Real GDP in the province is expected to grow 2.3 per cent this year and 2.5 per cent in 2015, closely tracking the Canadian economy.
"While the housing market has firmed after a period of weakness and the U.S. economy is gaining momentum, growth in China is cooling and the mining sector faces uncertainty," said Robert Kavcic, Senior Economist, BMO Capital Markets.
The housing market, particularly in Vancouver, has strengthened over the past year. "Sales across the province hit the best level in nearly four years in August, and the number of months supply of homes available for sale has receded to the lowest since early 2010," noted Mr. Kavcic. "In Vancouver, prices are rising again, up 5 per cent year over year. Housing starts have been remarkably stable in the province despite the volatility experienced in the resale market. New residential construction activity will likely remain stable as mortgage rates drift up and the current supply is gradually absorbed."
Meanwhile, mining investment has downshifted, with non-gas capital spending expected to fall sharply for a second straight year amid a lower commodity price backdrop. Overall exports have gained strength, up 8.3 per cent year over year through August. "While much of the country relies heavily on U.S. demand, B.C. delivers more than 43 per cent of its shipments to Asia," said Mr. Kavcic. "This is a growth opportunity, it also poses an added risk should the Chinese economy slow more abruptly."
Employment in B.C. is little-changed from two years ago. Construction employment continues to fade, while resource-sector jobs have fallen from peak levels. "However, the unemployment rate is a relatively low 6.1 per cent, and job growth has shown signs of turning the corner in recent months," stated Mr. Kavcic. "Population growth has also begun to pick up again, in part thanks to a reversal of net outward migration experience since early 2012.
"Businesses across British Columbia remain optimistic about the state of the economy," said Mike Bonner, Senior Vice President, B.C. and Yukon Division, BMO Bank of Montreal. "In fact, a recent BMO survey found that British Columbia business owners are leading the way when it comes to their plans to invest in their organization, with 38 per cent indicating they will invest more in their business next year. This compares to the national average of 25 per cent."
Mr. Bonner also noted that the export market continues to be an area of strength in British Columbia, especially for business owners operating in emerging markets, such as Asia. "Our clients have told us that the weaker loonie, along with the strengthened housing demand in the province, has created an attractive time for both our retail and commercial customers."
The full Provincial Monitor can be downloaded at www.bmocm.com/economics .
About BMO Financial Group
Established in 1817 as Bank of Montreal, BMO Financial Group is a highly diversified financial services organization based in North America. The bank offers a broad range of retail banking, wealth management and investment banking products and services to more than 12 million customers. BMO Financial Group had more than $586 billion in total assets and approximately 47,000 employees at July 31, 2014.
