From a macro perspective, Canada's economy is going through a rough patch and growth is slowing down. Several variables contribute to this such as the equity markets being off to a historically bad start, the weak Canadian dollar and the oil prices struggling to find a floor. On the bright side, looking at BC's economy allows us to let out a bit of a sigh of relief. There seems to be a multitude of indicators that provide British Columbians with a glimmer of hope as these indicators point to significant momentum underlying our provincial economy.
The pace in which consumer spending and retail sales grew last year was the fastest pace in close to a decade. This key indicator proved to be the largest component of BC's economy. As a result of this, this growth largely reflected markedly improved labour market fundamentals. While employment growth has seen sluggish growth for the past few years, the last six months of 2015 proved to be a stark contrast. Growth was moving at more than a 2% rate over the latter half of the previous year. Full-time employment seeing an increase was the driver spearheading the growth seen.
With the growth demonstrated, it is no surprise that British Columbians were in a spending mood. Not only did consumption goods see an increase in sales but larger paychques and confidence in the BC economy resulted in the third highest year on record for provincial home sales. With the relative strength of the economy in BC, it is no wonder why we are seeing more interprovincial migration with workers moving to BC. Since 2013, there has been a net inflow of more than 30,000 people from other provinces, resulting in population growth and adding to an already strong housing and consumer demand.
With a strong housing demand comes a record low supply of re-sale and new housing in BC. Developers reacted to this lack of supply by breaking ground on over 30,000 new housing units last year making it the highest number of housing starts since 2008. All in all, BC's economy is forecasted to continue being a growth leader in Canada for this year and the years to come.
Source: BCREA Economics - Brendon Ogmundson
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