Central 1 Credit Union: B.C. Economy to Slow in 2011, Then Pick Up for Next Two Years

VANCOUVER, BRITISH COLUMBIA–(Marketwire – Oct. 25, 2010) – B.C.’s economy will slow to a moderate 2.4 per cent growth rate in 2011 before expanding at a faster pace in the following two years, according to the latest Economic Analysis of British Columbia released today by Central 1 Credit Union.

Adjusted for inflation, this year’s economic growth is estimated at 3.1 per cent, compared with 2.0 per cent in 2009. The economy will downshift in 2011with the global economic slowdown and the winding down of fiscal stimulus, and without this year’s boost from the Winter Olympic Games.

Prospects for 2012 and 2013 are more positive, with a resurgence in private investment and consumer spending growth and the global economy on a stronger footing. Government spending on goods and services slows through to 2013, while infrastructure spending declines in both years. The trade deficit widens throughout the forecast.

“The economic recovery in B.C. is well established and the slowdown foreseen in 2011 will be temporary,” said Helmut Pastrick, Central 1’s chief economist. “B.C.’s economy is predicted to grow at above 3.0 per cent in both 2012 and 2013, with the upswing in global growth and higher domestic consumer spending and business investment.”

Domestic sectors will remain the growth drivers in the B.C. economy, although some of the forecast resurgence in private investment is based on improving external markets for energy and mining products. Several major pipeline and mining projects are assumed to begin later in the forecast period.

Industries projected to post the highest growth rates are resource extraction and processing, construction, and those related to consumer spending. Forestry and wood manufacturing will expand from deep recession lows, but remain well below pre-recession levels in 2013. Mining enjoys a revival due to new supply sources. Engineering and industrial construction of major projects and ongoing gains in residential activity will keep the construction sector growing at an above-average pace.

The complete report is available at: central1.com/publications/economics/pdf/ea/ea%202010_04.pdf

About Central 1

Central 1 Credit Union is the central financial facility and trade association for the B.C. and Ontario credit union systems, representing a consumer-oriented, full-service retail financial system that serves 2.9 million members and holds $70 billion in assets. Central 1 is owned primarily by its member credit unions, 45 in B.C. and 132 in Ontario. With offices in Vancouver, Mississauga and Toronto, it provides liquidity management, payments, Internet banking and trade association services to member credit unions, and banking and transaction services to corporate customers.