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Click to edit Master title style
Chris Lawless
Chief Economist
British Columbia Economic review & outlook
Presentation to the BC Real Estate Forum
March 30, 2016
Click to edit Master title style British Columbia overview
Province is leading the nation in growth
Economy much more stable…despite commodity slump
Export growth modest
Consumers confident, housing activity leading the way
Non-residential capital investment – some important regional projects underway
Tourism becoming a plus with lower C$
When does commodity cycle turn up?
What happens to the big energy projects?
2
Click to edit Master title style First, a look back...
Shaded areas are Canadian recessions
3
Click to edit Master title style Early ’80s: Western Canada’s Great Recession
4
Click to edit Master title style Boom & bust
5
Click to edit Master title style Roller coaster
6
Click to edit Master title style Why Canada is hurting
7
Click to edit Master title style Commodity prices
Indexes are in US$ terms
8
Click to edit Master title style Population growth
9
Click to edit Master title style B.C. employment & labour income
-2%
0%
2%
4%
6%
8%
2010 2011 2012 2013 2014 2015 2016
10
Year/year percentage change
Source: Statistics Canada
Labour income
Employment
6-month moving average
Click to edit Master title style B.C. manufacturing & exports
-30%
-20%
-10%
0%
10%
20%
30%
2010 2011 2012 2013 2014 2015
Mfg. Sales
Goods exports
11
Year/year % change in $ value, 12-month moving average
Source: Statistics Canada
Click to edit Master title style B.C. commercial & industrial building permits
$150
$175
$200
$225
$250
$275
$300
2010 2011 2012 2013 2014 2015 2016
12
Millions, 12-month trailing average
Source: Statistics Canada
+14% y/y
Click to edit Master title style Retail sales
-6
-4
-2
0
2
4
6
8
10
12
14
2010 2011 2012 2013 2014 2015 2016
13
Percent change in $ value
Source: Statistics Canada
6-month moving average
Click to edit Master title style B.C. motor vehicle sales
Source: Statistics Canada
-15
-10
-5
0
5
10
15
20
25
30
2010 2011 2012 2013 2014 2015 2016
Year/year % change in number of vehicles sold
6-month moving average
14
Click to edit Master title style B.C. restaurant & bar sales
-2
0
2
4
6
8
10
12
2012 2013 2014 2015
15
Year/year % change in $ value, monthly
Source: Statistics Canada
6-month moving average
Click to edit Master title style Consumer debt – 2015
-20% -10% 0% 10% 20% 30%
Newfoundland
Quebec
Ontario
Manitoba
Saskatchewan
Alberta
British Columbia
Canada
Bankruptcies Delinquencies*
* Excluding mortgages Source: Equifax Canada 16
Click to edit Master title style B.C. housing starts
15
20
25
30
35
40
2010 2011 2012 2013 2014 2015
’000 units, seasonally adjusted
17 Source: Statistics Canada
6-month moving average
Click to edit Master title style B.C. house prices
18
Click to edit Master title style B.C. CPI
-2%
-1%
0%
1%
2%
3%
4%
2010 2011 2012 2013 2014 2015
Total Excl food & energy
19
Year/year % change
Source: Statistics Canada
Target
Click to edit Master title style B.C. economic outlook
3.1%
0.7%
-2.4%
2.7% 3.0%
2.5% 2.1%
3.2%
2.4% 2.6% 2.5%
-4%
-2%
0%
2%
4%
6%
2007 2008 2009 2010 2011 2012 2013 2014 '15E '16F '17F
20
Percentage change in real GDP
Source: Statistics Canada F: average of largest 5 Canadian banks
Click to edit Master title style Vancouver leads major metro growth
2.8%
3.4% 3.9%
3.3% 3.1%
-4%
-2%
0%
2%
4%
6%
2013 2014 2015 '16F '17F
21
Percentage change in real GDP
Source: Conference Board of Canada
Click to edit Master title style External risks
Policy
Shifts
U.S.
Election
Chinese
Financial
Crisis?
• Substantive changes
• Fiscal stimulus
• Impact on economy?
• Divided gov’t continues?
• Democrats retain presidency?
• Republicans retain Congress?
• Debt overhang grows
• Defaults soar
• Contagion spreads
22