Langley Real Estate

B.C.'s economic growth will slow to 2.4 per cent in 2011 but pick up steam

in the following two years, Central 1 Credit Union predicted Monday in its latest report, Economic Analysis of B.C.

"The economic recovery in B.C. is well established, and the slowdown foreseen in 2011 will be temporary," a statement from Central 1's chief economist, Helmut Pastrick, said.

"B. C.'s economy is predicted to grow at above three per cent in both 2012 and 2013, with the upswing in global growth and higher domestic consumer spending and business investment."

The report says this year's economic growth is estimated at 3.1 per cent, compared with two per cent in 2009.

But the economy will shift downward in 2011 with the global economic slowdown, less fiscal stimulus and without this year's boost from the 2010 Olympics.

The report said domestic sectors will be the growth drivers, and that a resurgence in private investment, a stronger global economy and increased consumer spending bode well for 2012 and 2013.

It said improved external markets for energy and mining products will help drive growth, and that several major pipeline and mining projects are slated to begin later in the forecast period.

Industries projected to post the highest growth rates include resource extraction and processing, and construction. Forestry and wood manufacturing will expand but remain well below pre-recession levels in 2013.

It said unemployment will stay above seven per cent in 2011 but drop below six per cent by 2013.

The report said the aftermath from the financial crisis is a continuing constraint on the economies of the United States and Europe, with repercussions for economies with close trade linkages such as Canada.

It noted that while B.C. has considerable trade exposure to the U.S. "its expanding export market with the faster-growing Asia-Pacific economies is a positive force."

As for residential construction, the report said low mortgage rates will propel housing sales higher in 2011, driving up housing starts in the process, and that starts will approach 34,000 units in 2013.

"Conditions point to annual housing starts rising through 2013, not only due to favourable financing costs, more employment, income and population, but also to the release of pent-up demand accumulated in 2009 and 2010."