Central 1 Credit Union

Central 1 Credit Union

September 24, 2013 06:00 ET

B.C. Economy Will Gain Strength in 2014 and Beyond, Central 1 Credit Union Forecasts

Jobless rate will gradually decline, no sign of inflation

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Sept. 24, 2013) - B.C.'s economy will remain sluggish for the remainder of 2013 before gaining traction in 2014 and 2015, says a new forecast by Central 1 Credit Union.

Central 1 economist Bryan Yu has reduced his projection for growth this year to 1.4 per cent, but expects a modest gain of 2.4 per cent next year.

"Growth will increase to nearly 3 per cent in 2015 with further acceleration over the following two years as the U.S. continues to recover and large resource projects in the north come online," Yu said.

Highlights of the forecast for 2013-2017:

  • The global economy will expand more quickly from 2015 onward and U.S. growth is forecast to be 3 per cent or higher.
  • Interest rates will remain low and rise moderately later in the five-year forecast to near-normal levels in 2017.
  • Home sales will be up 5 per cent this year with an additional gain of 6 per cent in 2014.
  • Housing starts will fall 6 per cent to 25,800 units this year before gradually increasing to more than 30,000 units by 2016.
  • Forestry is one of the few bright lights thanks to higher demand and prices due to rising new home demand in the U.S. and Japanese reconstruction efforts.
  • Lower mineral and metal prices will hamper growth in resource extraction through 2014.
  • The unemployment rate will drop to 6.3 per cent in 2015 and average 5.5 per cent in 2016 and 2017.
  • Population growth will hold below 1 per cent through 2014 as people move to Alberta and Saskatchewan for jobs. By mid-2015 that will change and workers will flow into B.C.

"Subdued economic conditions and the weak labour market will hold back inflationary pressure in the province," Yu said. "Growth in the consumer price index for B.C. will be an anemic 0.2 per cent this year."

Inflation will rise to 1.2 per cent in 2014 before gradually trending higher to about 1.7 per cent in 2016-17 as a strengthening economy and labour market push prices higher.

The full report BC Economic Forecast 2013-2017 is available here: http://www.central1.com/sites/default/files/uploads/files/analysis_report/report_file/ea%202013_03%20BC.pdf

About Central 1

Central 1 is the central financial facility and trade association for the B.C. and Ontario credit union systems. Central 1 represents a consumer-oriented, full-service retail financial system that serves 3.2 million members and holds $88.7 billion in assets and is owned primarily by its member credit unions, 44 in B.C. and 96 in Ontario.

With offices in Vancouver, Mississauga and Toronto, Central 1 provides liquidity management, direct banking and payment service solutions as well as a wide range of trade services. For more information, visit www.central1.com.

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