British Columbia’s economy will continue growing at an above-average pace in 2007 and 2008 with real gross domestic product advancing by about 3.5 per cent, the Business Council of B.C. says.
That’s down from an estimated 4.3 per cent last year -- Statistics Canada will release official growth numbers for 2006 in early spring -- but continues the province’s strongest multi-year expansion since the late 1980s.
Overall consumer spending, retail sales and business investment should all enjoy another year of solid growth, according to the council’s 2007 economic forecast published today.
The main area of weakness will be exports with the plunge in U.S. housing starts taking a toll on lumber producers and softer natural gas prices slowing exploration and development in the northeast.
But this shifting landscape will go largely unnoticed in the increasingly diversified and service-oriented Lower Mainland region, says Jock Finlayson, executive vice-president of the business council.
Greater Vancouver’s expanding Asia-Pacific gateway role, coupled with high levels of activity in industries like advanced technology, film and television, and non-residential construction, will keep the region on a solid growth track.
Additional sources of strength in the Lower Mainland include spin-off benefits from the booming mining sector and stepped up preparations for the 2010 Olympics.
Job creation will slow in 2007, due mainly to a lack of available new workers, the council says. However, consumers are likely to continue to open their wallets, thanks to a long stretch of above-average job growth accompanied by rising wages and real estate prices.
Government spending is another positive for the economy, said Finlayson. The government is on track to post a surplus of at least $2 billion for 2006-07 and already it has announced an $885 million boost in health spending for the coming fiscal year.
Finlayson wouldn’t be surprised to see spending increases in other areas, and “a modicum of targeted tax relief” when the provincial budget is tabled on Feb. 20.