BC – The BCREA Commercial Leading Indicator (CLI) increased for the fourth consecutive quarter, rising 1.5 index points from the third to fourth quarter. The index now sits at 123.9, a 5 per cent increase from a year ago, and about a 1.2 per cent gain on a quarterly basis.
“The CLI was propelled higher by strong fourth quarter growth in the BC economy,” says BCREA Economist Brendon Ogmundson. “The strength of the underlying BC economy, particularly relative to the rest of Canada, makes BC a very attractive destination for commercial investment.”
Five straight quarters of rising BC manufacturing sales and a second consecutive year of more than 6 per cent growth in retail sales has driven the CLI to new heights this year. The underlying CLI trend, which smooths often noisy economic data, continues to push higher due to several quarters of strong economic statistics. That uptrend signals further growth in investment, leasing and other commercial real estate activity over the next two to four quarters.
Additional highlights include:
- Growth in wholesale trade jumped nearly 12 per cent year-over-year in the fourth quarter and was up 5 per cent on a quarterly basis. The dramatic increase was the result of higher sales of machinery and equipment, as well increased sales in the food and beverage sector. Retail sales were up 6.6 per cent year-over-year and about 1.5 per cent on a quarterly basis. Manufacturing sales also increased, rising 2.1 per cent on a quarterly basis.
- Canadian REITs were down about 1 per cent at the end of the fourth quarter, while rising short- and long-term interest rates following the US presidential election caused a widening of risk spreads. That combination led to a second consecutive decline in the CLI’s financial component.
- The CLI measure of office employment was essentially flat in the fourth quarter, following six months of strong gains. The manufacturing sector shed close to 1,600 jobs in the fourth quarter despite strong manufacturing activity.
