Business council scales back growth outlook of B.C.’s ‘mediocre’ economy
A slightly weaker global economy, the province’s soft job market and delays in the proposed liquefied natural gas (LNG) boom are making the Business Council of B.C. (BCBC) to scale backs its economic forecasts in the coming year.
The business advocacy organization predicts real gross domestic product (GDP) to expand by 2.2% this year and 2.9% in 2015, according to its mid-year economic report released July 15.
Last year, the BCBC predicted real GDP would grow in the range of 2.5% during 2014.
“The province’s domestic economy is best described as mediocre, with few signs yet of stronger growth,” the report noted.
“B.C. will be leaning more heavily on the (U.S.) to kick-start exports over the next two years.”
The BCBC said some of the setbacks are due to diminishing exports to China, where economic growth is cooling.
Instead, exports made gains over the past year through rising sales to the U.S., where the economy is strengthening.
Between January and May, B.C.’s international merchandise exports rose 6% compared with the same period a year earlier.
Exports to the U.S. went up 12% but exports to China dropped 2%. Shipments to the rest of the world rose just 1% at the beginning of 2014 compared with 2013.
The report noted B.C.’s labour market is lagging behind other western provinces but predicted job creation would pick up in 2015.
But the 2015 job market won’t be helped much by the proposed LNG boom Victoria has been pitching hard since last year’s election campaign.
“Our original timeline saw LNG construction commencing in the second half of 2015, but prudence suggests a delayed timeline,” the report said.
“It is important to recognize that (B.C.) faces strong competition from other LNG supply jurisdictions, with the (U.S.) in particular making faster progress in establishing the necessary infrastructure and supportive policy regimes.”
The BCBC said it does not expect LNG construction-related economic activity to get going until 2016.