The Central-1 Credit Union is reporting that next year, southern regions of the province could take the lead from those here in the north, when it comes to BC economic growth.
Senior economist Bryan Yu confirms that lower interest rates and the devalued loonie are seen as underpinning the modest growth this year.
However, he also has qualified the 2016 forecast, noting major construction projects will likely be the driving force of the economy for the following two years, and over the long term they might bring the north back into the picture.
“A lot of that is going to be driven in southern markets (such as the) Okanagan,” he says. “In terms of the relative shift, what we’re also seeing an an ongoing weakness in the Asian markets in China, which is really having a significant impact on the mining side of the economy, and also the oil side of the economy, and all the relationships we’re seeing there … Looking at the north as well though, I think we are still expecting to see some uplift, especially late 2016 into 2017. That’s when we are expecting to see more major construction starting to build up, and that should provide that lift.”
He says forestry is also a potential growth sector for the north given the improvement in the US housing market, but it’s believed the long-term timber supply impact of the mountain pine beetle infestation is likely to constrain production and growth.
Bryan sees the lower Canadian dollar as the key to this year’s healthy tourism season, fuelling cross border vacations by Americans, while at the same time leading BC residents to choose stay-at-home vacations.
He says anecdotal reports, particularly in the Okanagan, suggest there are areas where visitor accommodation is now quite scarce, but he adds, there’s no statistical proof.