Outlook for 2016 and 2017 Modest growth was expected to continue - - PowerPoint PPT Presentation

Key factors behind growth expectations were:

• Strength in the US economy.
• Favourable exchange rates.

Population growth was expected to continue to be a factor in the Capital region and Nanaimo. There was some uncertainty around what would happen with forestry as duties on softwood lumber exports to the US were expected.

Outlook for 2016 and 2017

Modest growth was expected to continue into 2017.

GDP

Economic growth was more robust than expected due to:

• Favourable exchange

rates.

• Improvements in

global economic conditions.

$- $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 $160,000 $180,000 2015 2016

BC Real GDP Millions of 2007 Chained Dollars

Goods-producing industries Service-producing industries Real GDP Growth Rate 3.72%

Source: Statistics Canada, CANSIM Table 379-0030

Exchange Rate

CAD was trading at between $0.73US and $0.78US between April 2016 and July 2017. Since then the CAD has appreciated and is trading $0.80US.

1.00 1.05 1.10 1.15 1.20 1.25 1.30 1.35 1.40 1.45

CAD : USD

Exchange Rate TD Forecast RBC Forecast

Source: Bank of Canada, TD Economics and RBC

Exchange Rate

Population growth

Continued growth in most regions.

• Year over year

increases in growth rates.

Population Growth by Region 2015 to 2016

Source: BC Stats, Population Estimates by Regional District

Unemployment Rate

Unemployment rate declined to 5.0 percent and is among the lowest in BC.

5.8% 5.5% 7.7% 9.7% 8.0% 7.8% 7.4% 5.0% 5.0% 6.2% 6.9% 7.0% 7.0% 8.5%

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0%

Unemployment Rate by Region

2017 (Jan-June) 2016 BC 2017 - 5.4%

Cariboo Thompson-Okanagan Kootenay Northeast North Coast and Nechako Lower Mainland – Southwest Vancouver Island and Coast Source: Statistics Canada, CANSIM Table 282-0122 and Table 282-0123

Labour Force and Employment

Improving labour market conditions have led to increases in both employment levels and the size of the labour force.

*Preliminary estimates that have not been seasonally adjusted Source: Statistics Canada, CANSIM Table 282-0122 and Table 282-0123 320.0 330.0 340.0 350.0 360.0 370.0 380.0 390.0 400.0 410.0 2014 2015 2016 January to June 2017* Thousands

Labour Force and Employment

Labour Force Employment

Labour Force

Improving labour market conditions have led to increases in the size of the labour force and the labour force participation rate.

58.8% 59.9% 61.7% 66.2% 66.5% 68.0% 76.9%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0%

Labour Force Participation Rate by Region 2016

Northeast North Coast Nechako Cariboo Lower Mainland - Southwest Thompson - Okanagan Kootenay Vancouver Island and Coast

Source: Statistics Canada, CANSIM Table 282-0123

Declines in the population aged 25 to 49 appear to have slowed and appear to have stabilized. Participation rates are relatively stable for those aged 15 to 49 while participation rates have increased among those aged 50 and over. Older workers may be choosing to work longer due to a desire to stay in some form of paid employment or it may be due to economic need.

Labour Force

Growing labour force.

Building Permits

The value of building permits has grown by approximately 19% between January and June 2017.

$- $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 $800,000 $900,000

Residential Commercial Industrial Institutional- Government

Building Permit Values January to June (in $000s)

2016 2017 Source: Statistics Canada, Produced by BC Stats

Business Environment

Business incorporations are above their 3 year average and failures are below their 3 year average.

500 1,000 1,500 2,000 2,500 3,000 Capital Nanaimo Cowichan Valley Comox Strathcona Alberni- Clayoquot Mount Waddington

Business Incorporations

3-year Average (2013-2015) 2016

Source: BC Stats, Business Formations and Failures

T

• urism

Ferry traffic is at its highest level since 2008 but growth has leveled

• ff.
• 5.0%
• 3.0%
• 1.0%

1.0% 3.0% 5.0% Buses Commercial Vehicles Passenger Vehicles - Overheight Passenger Vehicles - Underheight Passengers

Ferry Traffic – January to June 2017 year over year change

Source: BC Ferries

T

• urism

Growth remains positive but the growth rate is lower.

• US visitor numbers

are stable.

• International visitors

numbers are up.

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% Occupancy Rates Average Daily Room Rate Passengers at Regional Airports

Visitor Indicators Growth rates, 2016 and 2017 (Jan-Jun)

2015-2016 (Jan – Dec) 2016-2017 (Jan - Jun)

Source: Destination BC, T

• urism Indicators

Forestry

Shipments of forest products are relatively stable while shipments

• f logs have increased.
• 1,000,000

2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 2012 2013 2014 2015 2016 Metric Tonnes

Forest Product and Log Volumes Through Port Alberni and Port of Nanaimo

Logs Forest Products

Source: Port Alberni and Port of Nanaimo

Forestry

Since 2012 production has been relatively stable.

• 0.5

1.0 1.5 2.0 2.5 3.0 3.5 4.0 2012 2013 2014 2015 2016 Millions of Cubic Metres

Annual Lumber Production BC Coast

Source: Statistics Canada CANSIM Table 303-0064

Expiry of the Softwood Lumber Agreement has led the US Department of Commerce to impose countervailing duties on softwood lumber imports from Canada.

• Final determination of duties is expected in November

Declining timber supply.

Forestry

Outlook remains positive but growth expectations are limited

Aquaculture

After consecutive yearly declines, salmon production has been growing. Shellfish production has been stable.

10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 2011 2012 2013 2014 2015

Tonnes

Finfish and Shellfish Production

Finfish Shellfish

Source: Department of Fisheries and Oceans, Aquaculture Production Quantities and Values

Agriculture

Since 2011 the number

• f farms on

Vancouver Island has declined by 6.7%.

Source: Statistics Canada, CANSIM Table 004-0200

• 200

400 600 800 1,000 1,200 1,400 1,600 Animal Production Crop Production

Farm Counts 2011 and 2016

2011 2016

International Education

International enrolments are continuing to grow but at a slower rate.

2,000 4,000 6,000 8,000 10,000 12,000 2012 2013 2014 2015

International Enrolments By Type 2012 to 2015

K-12 Post Secondary

Source: BC Ministry of Advanced Education, BC HEADset and BC Ministry of Education

Housing Market

Continued significant growth in housing prices is leading to declining affordability.

Housing – Benchmark Single Family Home Prices June 2017

Source: Vancouver Island Real Estate Board Monthly Statistical Package June 2016, Victoria Real Estate Board Statistics Package for Media June 2016.

Increases in key lending rate by the Bank of Canada. Uncertainty around US trade and fiscal policies. On Vancouver Island the key factors affecting growth are expected to be:

• Tight labour market that is making it difficult for businesses to attract and retain

workers in some sectors.

• Slowing of growth in visitors and international students.
• Continued population growth.

Outlook for 2017 and 2018

Growth is expected to moderate

Ministry of Jobs, Trade and Technology