CANADA – Following strong economic results in 2017, Western Canada remains on pace to lead growth in Canada again this year, according to the recently released BMO Blue Book report. Assuming real estate and consumer spending trends are sustained in Alberta and B.C., the region is expected to maintain combined growth above 2 per cent for 2018.
Key Report Highlights:
- Region’s GDP is expected to rise 2.3 per cent on average, slightly above the national average for 2018;
- Steady growth led by B.C. alongside a strong labour market; and
- Alberta bounces back from -3.8 per cent GDP growth, to potentially lead all provinces with 4.1 per cent growth this year.
Coming off strong results last year, British Columbia is expected to post a fourth consecutive year of GDP growth in excess of 3 per cent, hitting the 3.8 per cent mark in 2017. The province’s performance is expected to moderate after that, assuming labour market and consumer spending trends remain steady.
The housing market has picked back up as the impact of the province’s cooling measures has faded. Even though benchmark prices were up 10.9 per cent year over year as of September, B.C.’s lower unemployment suggests its labour market can support a higher cost of living more than elsewhere.
According to BMO Capital Markets Senior Economist Robert Kavcic, B.C.’s employment growth leads all provinces. “The jobless rate is nearing a decade low at 5.1 per cent. That is drawing in increased migration from other Canadian provinces, adding a steady stream of international inflows of more than 50,000 in total in the 12 months through June.”
Entering 2018, B.C.’s credit rating is the strongest in the country, with a projected $246 million surplus this fiscal year. This, however, could change in the event of a shift in spending priorities.
“The B.C. economy continues to outpace provincial peers and reflects the optimism our customers have in local markets,” adds Mike Bonner, Senior Vice President and Regional Head, British Columbia & Yukon Division, BMO Bank of Montreal.
Additional regional analysis and figures are available at the following link.