The Business Council takes a look at the driving indicators behind BC's 2017 economic outlook. The economy will remain healthy, but growth will downshift in 2017.

1. B C E C O N O M I C R E V I E W AN D O U T L O O K
FIRST QUARTER (MARCH), 2017
BC ECONOMY STILL HEALTHY… BUT GROWTH WILL DOWNSHIFT IN 2017

2. 2
BCERO Q1 HIGHLIGHTS
Following three years in which
BC topped provincial growth
charts, in 2017 BC economy
will lose some momentum.

3. 3
GDP is forecast to expand
at a slightly below average pace of
2.2% in 2017
Similar performance expected in 2018.

4. B C R E AL G D P G R O W T H , %
4
e=estimate f=Forecast.
Source: Statistics Canada
-3
-2
-1
0
1
2
3
4
5
05 06 07 08 09 10 11 12 13 14 15 16e 17f 18f
Avg growth
1996-2015

5. R E AL G D P B Y P R O V I N C E 5
Source: averages of forecasts from BMO, CIBC, RBC, Scotiabank and TD.
-3
-2
-1
0
1
2
3
BC Alta Sask Man Ont Que NB NS PEI NL
GDP growth 2016 estimates, %
-3
-2
-1
0
1
2
3
BC Alta Sask Man Ont Que NB NS PEI NL
GDP growth 2017 forecasts, %

6. 6
• Canadian dollar expected to trade
between 73 to 76 US cents through
2017.
• Low interest rates are expected to
continue at 0.5% through 2017.

7. 7
Following a lackluster 2016, global economic activity is slowly
accelerating, pointing to a better economic backdrop for 2017-2018.
Growth prospects contribute to better, but still mixed, pricing conditions
for BC’s major commodity exports.

8. 8BC had a record breaking export year: in 2016, BC’s
merchandise exports climbed to almost $40 billion.

9. B C M E R C H AN D I S E E X P O R T S , B I L L I O N S $
9
Source: BC Stats..
10
15
20
25
30
35
40
45
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16

10. 10
…but the sizeable gains in export sales seen over the past couple
of years will not be matched again in 2017.
All of BC’s leading export industries will continue to benefit
from a relatively weak loonie…

11. B C M E R C H AN D I S E E X P O R T S , Q U AR T E R LY S E AS O N A L LY
AD J U S T E D , B I L L I O N S $
11
Source: BC Stats.
2.5
3.0
3.5
4.0
4.5
5.0
5.5
6.0
6.5
08 09 10 11 12 13 14 15 16
US Rest of world Surge in second half of
year consistent with
stronger global economy

12. 12
Slowdown in BC’s real estate/housing
complex, particularly in Metro
Vancouver, is a key reason why
overall economic growth is
projected to slow over 2017-2018.

13. B C H O U S I N G S TAR T S , Q U AR T E R LY S AAR
13
Source: Statistics Canada. Seasonally adjusted annual rates
5
10
15
20
25
30
35
40
45
50
05 06 07 08 09 10 11 12 13 14 15 16

14. 14
Consumer spending is forecast to
remain solid, but it too will slow after
two years of brisk gains.

15. C O N S U M E R S P E N D I N G S T R O N G 15
Source: Statistics Canada.
-1
0
1
2
3
4
5
6
7
8
9
2012 2013 2014 2015 2016
BC retail sales growth, y/y %
Avg. growth
1996-2016
-1
1
3
5
7
9
11
13
2012 2013 2014 2015 2016
BC food services receipts growth, y/y %
Avg. growth
1999-2016

16. 16
In contrast to residential
investment (which has been a
major source of economic
growth), business investment has
been relatively soft in BC.
But in 2017, investments in construction
and machinery and equipment should
make a small positive contribution to
economic growth.

17. C AP I TA L I N V E S T M E N T I N C O N S T R U C T I O N TO P I C K U P I N 2 0 1 7
17
Source: Statistics Canada.
0
5
10
15
20
25
2006 2008 2010 2012 2014 2016
BC capital spending, construction $B
0
2
4
6
8
10
12
2006 2008 2010 2012 2014 2016
BC capital spending, M&E $B

18. 18BC’s labour market should remain healthy, with the
unemployment rate continuing to edge lower; however, job
creation will slow after 2016’s outsized jump in employment.

19. B C E M P L O Y M E N T G R O W T H , %
19
Source: Statistics Canada, Labour Force Survey.
-3
-2
-1
0
1
2
3
4
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16
Strongest increase
since 1994 (just barely)

20. 20
…but jobs will continue to be concentrated in urban areas.

21. J O B G R O W T H C O N C E N T R AT E D I N T H E L O W E R M AI N L A N D 21
Source: Statistics Canada, LFS.
95
100
105
110
115
120
10 11 12 13 14 15 16
Employment, indexed Jan 2010=100
lower mainland
rest of BC
-3
-2
-1
0
1
2
3
4
5
6
Van
Island
Lower
Main.
Thom.
Ok
Koot-
enay
Cariboo NC /
Nechako
North-
east
Employment growth by region 2016, %

22. 22Concluding thoughts
Softer conditions across
many sectors of the BC
economy suggests that the
province will shift from an
above average pace of
expansion to a slightly
below average pace over
the next couple of years.

23. B C E C O N O M I C R E V I E W AN D O U T L O O K
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