B.C.’s economy faces ‘significant challenge’ in year ahead: report

Credit: Sean Pollock

The latest Provincial Economic Forecast by TD doesn’t have great news 

In news that British Columbians absolutely didn’t need to hear, the province’s economy is expected to take a turn for the worse compared to most other provinces in the coming year. That’s according to the newly released Provincial Economic Forecast from TD Economics.

In terms of Real GDP Growth Forecast, TD has B.C. at 1.2 percent in 2023. That’s only behind Quebec (1.0) in the country.

While the bank has seen “the impressive staying power of household spending across regions,” they still believe that resilience is on borrowed time.

Thanks largely to the additional 50 basis points of interest hikes likely on the way and a slower pace of rate cuts next year, borrowing costs are projected to stay higher for longer. That’s a key factor in TD’s call for 2024 growth slowdowns across the country.

Since B.C. has higher average household debt burdens than most of the province, the report concludes that we’ll feel that slowdown close to home.

Additionally in B.C., TD expects job growth to slow. Already, the January to May period slowed to 1.5 percent growth year-over-year, which was below the national pace.

In the coming quarters, TD expects a further flattening in employment gains, to pull the province’s unemployment rate to 5.5 percent by late 2023. It was 4.6 percent last year. The bank also expects housing starts in B.C. to slow this year and into 2024.