VANCOUVER, BRITISH COLUMBIA--(Marketwired - Oct. 6, 2016) - Following equally strong economic results in 2015, British Columbia remains on pace to lead growth in Canada this year, according to the BMO Blue Book released today. Assuming real estate and spending trends are sustained, the actualized forecast will be the province's strongest three-year performance since '07.
Much like the U.S. Federal Reserve's Beige Book, the BMO Blue Book combines the expertise of BMO's economists with information on current national and provincial business conditions provided to BMO's commercial bankers by local businesspeople.
Housing prices have dominated market conversations in B.C. this year, resulting in the introduction of a 15 per cent foreign buyer tax to try to stabilize prices that had risen to the highest in the country - increasing more than 30 per cent compared to last year. However the fact that the province simultaneously holds the lowest unemployment rate in the country suggests its labour market can support a higher cost of living more than elsewhere.
Robert Kavcic, Senior Economist, BMO Capital Markets, notes that doesn't mean home buyers in B.C. are in the clear. "The measures the B.C. government put in place are working to soften sales, particularly at the high end of the market. On the supply side, housing starts have broken out of the stable range led by a record number of multi-units," said Mr. Kavcic. "Some budding signs of speculation recently, plus this coming wave of condo supply, could be a risk to watch in the year or two ahead."
Additional bright spots in the region expected to maintain the current landscape into 2017 include:
- Benefits to the agriculture sector as a result of lower fuel costs;
- Growth potential of Aboriginal businesses; and a
- Boost in U.S. and intra-Canada tourism as a result of the low dollar.
According to Mike Bonner, Senior Vice President and Regional Head, British Columbia & Yukon Division for BMO, "the B.C. economy continues to outpace provincial peers and foster optimism among our local commercial customers, that they will see a good return in the investments they've made to grow their businesses." Mr. Bonner added that availability of capital and a weaker Canadian dollar is further diversifying the economy with momentum in the knowledge-based industry sector.
However, Mr. Kavcic added that, unlike its neighbours, who face the implications of a large dependence on oil and gas, B.C.'s reliance on exports to Asia could pose risks if the Chinese market slows.
BMO is here to help with a highly-skilled team of experts who can make lending decisions at the local level to help the bank's commercial clients boost productivity, expand into new markets and make strategic investment decisions that will help propel growth and drive success.
The full BMO Blue Book can be downloaded at: www.bmocm.com/economics.
About BMO Financial Group
Established in 1817, BMO Financial Group is a highly diversified financial services provider based in North America. With total assets of $692 billion as of July 31, 2016, and over 45,000 employees, BMO provides a broad range of retail banking, wealth management and investment banking products and services to more than 12 million customers and conducts business through three operating groups: Personal and Commercial Banking, Wealth Management and BMO Capital Markets.