BC Business
Vancouver's economy is expected to grow by 2.9 per cent in 2014, slightly more than the province as a whole.
Vancouver’s economy is expected to grow by 2.9 per cent in 2014, slightly more than the province as a whole.
An increase in consumer spending, a healthier forestry sector and an uptick in manufacturing output will drive B.C.’s economy in 2014 and 2015, according to the Conference Board of Canada’s annual outlook on the economies of the country’s cities. Vancouver’s GDP is expected to grow by 2.8 per cent this year, below the 25-year norm of 3 per cent growth, while Victoria’s real GDP growth is forecasted at 1.8 per cent. Rising output won’t necessarily translate into jobs, as the Lower Mainland’s manufacturing job count is expected to continue sagging in the near term. Manufacturing jobs dropped 14.4 per cent in 2013, the biggest loss since the late 1980s. While B.C. has lagged the rest of Canada in job creation in 2013, the report forecasts an expansion in payrolls in 2014 and 2015, which will spur retail sales and demand for commercial services. The jobs forecast in Vancouver and Victoria isn’t as sunny. Employment in Vancouver’s film, media and tech sectors is expected to fall by 4.1 per cent this year, and remain static over the next five years. The overall unemployment rate in Vancouver will fall from 7.3 per cent this year to 6.1 per cent in 2015, driven by job growth in the tourism sector. The report also expressed concern that Vancouver’s pricey housing market and relatively low incomes pose a threat to potential GDP growth. Victoria’s economic forecast will continue to be grim: the capital region’s GDP contracted in 2013, following multiyear cuts to the public sector. A weak Canadian dollar, condo construction and investments in UVic could push the city back into positive growth, according to the report. The Conference Board expects the Fraser Valley to see growth at 2.9 per cent, buoyed by BC Hydro’s ongoing renovation of Ruskin dam. The region could see slight growth in payrolls and consumer spending as interprovincial emigration slows down over the next two years. All three urban regions are expected to see an increase in services output–driven by real estate services, tourism-related services and retail–while economic growth and employment in manufacturing, utilities and natural resources will lag behind. The Conference Board also noted that its forecast for B.C. is underpinned by the construction and operation of LNG export facilities in the North. The economies of most Canadian cities are expected to grow faster this year than in 2013: Vancouver’s growth rate is expected to fall just short of Toronto’s and Montreal’s, and will lag Calgary, Edmonton and Regina “[The] Prairie cities will have the fastest growing economic fortunes in 2014,” said Alan Arcand, an economist and author of the study. “The growing strength of the U.S. economy and a slightly weaker dollar will help stimulate exporting activity and in turn bolster economic growth.”