'Vibrant' construction growth for 2007
Vancouver's consumers have finally come to life, conference board says
The Vancouver area's economic expansion will slow in 2007 but the region will still enjoy the third-fastest growth among 27 Canadian cities next year, a new report says.
The Vancouver area's real gross domestic product will grow by 3.1 per cent in 2007, down from 3.9 per cent in 2006, the Conference Board of Canada said yesterday.
"Growth in the construction sector is expected to be vibrant again in 2007 but services output is set to slow down somewhat," the board said in its winter outlook.
"In line with overall economic activity, both employment and personal income are set to record healthy increases." These increases will support an increase in consumer spending, the board said. Retail sales should expand by 6.2 per cent next year, following an estimated jump of 8.1 per cent this year.
The 6.2-per-cent increase will trigger a rise of four per cent in the wholesale and retail trade sector. "Vancouver's consumers have finally come to life," the board said.
On the downside, steeper prices and higher borrowing rates will continue to trim housing demand.
"As a result, housing starts are forecast to drop by 10 per cent in 2007, albeit to a still respectable 17,000 units," the board said.
But a flurry of non-residential building projects will boost total output in the city's construction sector by five per cent next year, the board said.
Vancouver, Abbotsford and Victoria shared third spot in the board's ranking of metropolitan economic growth in 2006.
While Vancouver will maintain this ranking in 2007, Abbotsford will slip to fifth place with forecast real GDP growth of three per cent. A slowdown in the Victoria area's key services sector will reduce its GDP growth to 2.1 per cent, putting the city in 17th place next year, the board said.
In separate reports released yesterday, the National Bank and Canadian Chamber of Commerce predicted the national economy will grow between 2.2 and 2.4 per cent next year.
Contributing to Vancouver's continued economic expansion is construction of the Canada Line on Granville Street between Hastings and Pender.
Photograph by : Arlen Redekop, The Province