British Columbia economic growth will be so-so in 2012 and better in 2013, according to a new outlook report from the Conference Board of Canada.
Timber sales to the United States will begin to revive, both metal mining and primary metals manufacturing will be stronger, and B.C.'s $8-billion share of a national shipbuilding contract will provide a further boost to the province's economy, the board said.
The board's Metropolitan Outlook for 2012 says a "tepid" recovery of the struggling U.S. housing market means a positive outlook for an economic bellwether, B.C.'s iconic forest industry, which should see a 3% production increase this year and a 4.1% increase in 2013.
"Our forecast calls for an acceleration in U.S. employment growth over the next two years and this will help lift new home construction [in the U.S.] to 965,000 units in 2013, compared with an estimated 594,000 housing starts in 2011," the board stated in the report.
A "glut" of distressed properties has depressed prices in many U.S. markets -- "but many years of new home construction well below the level of household formation have generated a lot of pent-up demand for housing."
"Moreover, even though demand from the U.S. has continued to languish, demand from China for B.C.'s wood and wood products is soaring."
The board said that "against a backdrop of global uncertainty and weak growth in the United States," B.C.'s inflation-adjusted gross domestic product will this year grow 2.5% ($161 million in 2002 dollars) and 3.5% ($167 million) in 2013.
Nationally, real GDP averaged out at 2.1% last year and it's predicted to move up to 2.4% in 2012 and 3.3 per cent in 2013.
Total real manufacturing output in B.C. will grow 4% this year and 5.4% in 2013 as Seaspan Marine begins work on an $8-billion federal contract to construct non-combat vessels at its Vancouver Shipyards.
"In total, this contract is forecast to boost manufacturing output by a cumulative $2.9 billion over 2013 to 2021."
The news is less encouraging for the construction sector, which is forecast to fall 15.5 per cent in 2012 and a further 5.4 per cent in 2013 as a consequence of diminished government infrastructure stimulus spending.
Some of the drop will be offset by private-sector investment, which is projected to go up 9% this year and 5.9% in 2013, including a liquefied natural gas plant at Kitimat and a $2.5-billion upgrade to the Kitimat aluminum smelter.
Among Canadian cities, Vancouver ranked seventh for real GDP growth in 2011 at 2.9%. St John's was Canada's most robust city last year, with 5.4% real GDP growth.
Vancouver is projected to drop to eighth place, with 2.6% growth, in 2012, then jump to fourth place with 3.4% growth in 2013.
The board noted that Vancouver housing starts grew "by a jaw-drop-ping 16.6% to almost 18,000 units" last year and regional employment rose 2.5%.
Economic sectors that grew more than 3% include utilities, manufacturing, transportation, ware-housing and business services.
The housing market "showed signs of fatigue" in the second half of 2011, leading to predictions that Vancouver housing starts will drop to 16,700 units this year, but the board described the decline as a "pause" before population growth pushes it ahead again by 2013 through 2016.
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