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

Outlook for 2016 and 2017 Modest growth was expected to continue into 2017. 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.

BC Real GDP Millions of 2007 Chained Dollars GDP $180,000 $160,000 Real GDP Growth Rate 3.72% $140,000 $120,000 $100,000 Goods-producing Economic growth was industries $80,000 more robust than Service-producing $60,000 expected due to: industries $40,000 • Favourable exchange rates. $20,000 $- • Improvements in 2015 2016 global economic conditions. Source: Statistics Canada, CANSIM Table 379-0030

Exchange Rate Exchange Rate 1.45 1.40 1.35 1.30 CAD : USD 1.25 CAD was trading at 1.20 between $0.73US and 1.15 $0.78US between April 1.10 2016 and July 2017. 1.05 Since then the CAD has 1.00 appreciated and is trading $0.80US. Exchange Rate TD Forecast RBC Forecast Source: Bank of Canada, TD Economics and RBC

Population Growth by Region 2015 to 2016 Population growth Continued growth in most regions. • Year over year increases in growth rates. Source: BC Stats, Population Estimates by Regional District

Unemployment Rate by Region Cariboo 8.5% Unemployment 7.4% Rate Thompson-Okanagan 7.0% 7.8% BC 2017 - 5.4% 7.0% Kootenay 8.0% 2017 (Jan-June) 6.9% Northeast Unemployment rate 2016 9.7% declined to 5.0 percent 6.2% North Coast and Nechako and is among the lowest 7.7% in BC. 5.0% Lower Mainland – Southwest 5.5% 5.0% Vancouver Island and Coast 5.8% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% Source: Statistics Canada, CANSIM Table 282-0122 and Table 282-0123

Labour Force and Employment 410.0 Labour Force 400.0 and Employment 390.0 380.0 Thousands 370.0 Labour Force Improving labour market 360.0 Employment conditions have led to 350.0 increases in both employment levels and 340.0 the size of the labour 330.0 force. 320.0 2014 2015 2016 January to June 2017* *Preliminary estimates that have not been seasonally adjusted Source: Statistics Canada, CANSIM Table 282-0122 and Table 282-0123

Labour Force Participation Rate by Region 2016 Labour Force 76.9% Northeast 68.0% North Coast Nechako 66.5% Cariboo 66.2% Lower Mainland - Southwest Improving labour market conditions have led to 61.7% Thompson - Okanagan increases in the size of the labour force and the 59.9% Kootenay labour force participation rate. 58.8% Vancouver Island and Coast 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% Source: Statistics Canada, CANSIM Table 282-0123

Labour Force Growing labour force. 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.

Building Permit Values January to June (in $000s) $900,000 Building Permits $800,000 $700,000 $600,000 $500,000 The value of building 2016 $400,000 2017 permits has grown by $300,000 approximately 19% $200,000 between January and June 2017. $100,000 $- Residential Commercial Industrial Institutional- Government Source: Statistics Canada, Produced by BC Stats

Business Incorporations 3,000 Business 2,500 Environment 2,000 1,500 Business incorporations are above their 3 year 1,000 average and failures are below their 3 year 500 average. 0 Capital Nanaimo Cowichan Comox Strathcona Alberni- Mount Valley Clayoquot Waddington 3-year Average (2013-2015) 2016 Source: BC Stats, Business Formations and Failures

Ferry Traffic – January to June 2017 year over year change 5.0% T ourism 3.0% 1.0% Ferry traffic is at its Buses Commercial Passenger Passenger Passengers highest level since 2008 -1.0% Vehicles Vehicles - Vehicles - Overheight Underheight but growth has leveled off. -3.0% -5.0% Source: BC Ferries

Visitor Indicators Growth rates, 2016 and 2017 (Jan-Jun) T ourism 9.0% 8.0% 7.0% 6.0% 5.0% Growth remains positive 2015-2016 (Jan – Dec) 4.0% but the growth rate is 2016-2017 (Jan - Jun) 3.0% lower. 2.0% • US visitor numbers are stable. 1.0% • International visitors 0.0% Occupancy Rates Average Daily Room Passengers at Regional numbers are up. Rate Airports Source: Destination BC, T ourism Indicators

Forest Product and Log Volumes Through Port Alberni and Port of Nanaimo Forestry 6,000,000 5,000,000 4,000,000 Metric Tonnes 3,000,000 Shipments of forest products are relatively 2,000,000 stable while shipments of logs have increased. 1,000,000 - 2012 2013 2014 2015 2016 Logs Forest Products Source: Port Alberni and Port of Nanaimo

Annual Lumber Production BC Coast Forestry 4.0 3.5 3.0 Millions of Cubic Metres 2.5 Since 2012 production 2.0 has been relatively 1.5 stable. 1.0 0.5 - 2012 2013 2014 2015 2016 Source: Statistics Canada CANSIM Table 303-0064

Forestry Outlook remains positive but growth expectations are limited 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.

Finfish and Shellfish Production 100,000 Aquaculture 90,000 80,000 70,000 60,000 Tonnes Finfish 50,000 After consecutive yearly Shellfish declines, salmon 40,000 production has been 30,000 growing. 20,000 Shellfish production has 10,000 been stable. 0 2011 2012 2013 2014 2015 Source: Department of Fisheries and Oceans, Aquaculture Production Quantities and Values

Farm Counts 2011 and 2016 Agriculture 1,600 1,400 1,200 1,000 800 2011 Since 2011 the number 2016 of farms on Vancouver 600 Island has declined by 400 6.7%. 200 - Animal Production Crop Production Source: Statistics Canada, CANSIM Table 004-0200

International Enrolments By Type 2012 to 2015 International 12,000 Education 10,000 8,000 6,000 International enrolments K-12 are continuing to grow Post Secondary 4,000 but at a slower rate. 2,000 0 2012 2013 2014 2015 Source: BC Ministry of Advanced Education, BC HEADset and BC Ministry of Education

Housing – Benchmark Single Family Home Prices June 2017 Housing Market Continued significant growth in housing prices is leading to declining affordability. Source: Vancouver Island Real Estate Board Monthly Statistical Package June 2016, Victoria Real Estate Board Statistics Package for Media June 2016.

Outlook for 2017 and 2018 Growth is expected to moderate 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.

Ministry of Jobs, Trade and Technology