RBC Downgrades B.C.'s Economic Growth Prediction
By 250 News
British Columbia’s economic growth prospects have declined slightly to 3.1 per cent in 2007, and 2.9 per cent in 2008, according to a provincial economic outlook released today by RBC.
“A diversified economy is key to B.C.’s solid growth picture for this year and next,” said Craig Wright, vice-president and chief economist, RBC. “With two years to go before the flame is lit on Vancouver’s 2010 Olympic and Paralympic Winter Games, B.C.’s economy will be receiving increasingly needed stimulus to offset downside risks related to the slowing U.S. economy.”
A modest fiscal stimulus from healthy government surpluses; B.C.’s growing focus upon port development aimed at cashing in on Asian trade; and strong job growth, coupled with decent wage gains that are supporting one of the better retail sales pictures in the country, are also some of the province’s positive economic influences.
B.C. continues to benefit from strong mineral prices that have remained high for longer than anticipated. However, weaknesses in other resource sectors are starting to show, as sawmill production volumes are off their 2006 peak and gas production in the Greater Sierra and Cutbank Ridge regions is also tracking lower than last year.
according to the report. The emergence of further downward risks warrants a cautious outlook for the next decade
The forest industry continues to be challenged with weak prices.
The report also says new estimates indicate the spread of the mountain pine beetle will create losses of marketable pine by as much as 75 % by the end of five years. As well, unlike numerous other regions of the country, there are no real major new capital initiatives that are likely to fill the post-Vancouver 2010 void next decade.
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