How does British Columbia stack up as a place to WORK, INVEST, and LIVE? Find out in the BC Check-Up 2019 report.
Download the PDF here.
Outlook 2020
BC’s economic growth in 2019 is expected to moderate compared to previous years and is expected to pick up its momentum in 2020. According to TD Economics, the province’s predicted GDP growth rate for 2019 is 1.7% down from 2.4% in 2018. This is largely due to a significant slowdown of BC’s housing market. Two key factors that are protecting the province’s economy from the full impact of the housing market slowdown is the ongoing strengths of BC’s labour market and private sector investment. However, current global tensions and politics may further affect BC’s economic opportunities.
BC continues to have the country’s lowest unemployment rate and is continuing to expand, adding 34,400 jobs between December 2018 and July 2019. Growth in the service sector, particularly in the trade; educational services; and finance, insurance, real estate, rental and leasing industries were entirely responsible for the employment gains. Employment is expected to continue into 2020.
Although the estimated capital cost of BC’s major projects fell by 13.1% to $355.3 billion between the fourth quarter of 2018 (Q4 2018) and Q1 2019, private sector non-residential investment remains active, particularly for commercial building construction. Between Q1 2018 and Q1 2019, non-residential building construction investment increased by $447 million. This was largely propelled by commercial investment, which grew by 41.3% in the same time period.
Looking at global factors, while the Canada-United States-Mexico Agreement (CUSMA) was signed in November 2018, the treaty has not been ratified and tariffs on our softwood remain in place.
This has affected our overall trade outlook. The value of our softwood lumber exports fell by almost 20% to $2.6 billion when looking at year-to-date data between June 2018 and June 2019. Continued depressed lumber prices have shuttered various mills across the province.
Although there are ongoing tensions between Canada and China, as well as the United States and China, they have not affected BC’s trade relationships with China. Year-to-date data suggests a 2.9% increase in the value of BC’s exports to China between June 2018 and June 2019. However, as the protests in Hong Kong continue and the legal case with Huawei’s CFO remains unresolved, there is some uncertainty associated with this trade relationship.
Overall, BC can expect ongoing economic uncertainty into 2020, with TD Economics forecasting a slight rebound in economic growth to 2.0%, due to an expected recovery in the housing market. Continuing to diversify our economy – both our goods and services as well as our trade partners – will be beneficial as BC tries to navigate these times of change.