Vancouver Island remains strong in face of slowing B.C. economy: report
The B.C. Legislature in Victoria is shown in this undated file photo.
Published Tuesday, November 20, 2018 8:50AM PST
Vancouver Island’s economy is well-positioned, even though it is expected to slow somewhat along with the rest of the province.
That’s according to a new economic analysis of B.C. by Central 1, a service provider for credit unions.
British Columbia’s economy (measured by Gross Domestic Product) is forecast to slow from a growth of 3.8 per cent in 2017, to between 2.5 and 3 per cent over the next two years.
According to the report’s author Bryan Yu, a slowdown in the housing market is the major factor.
However, Vancouver Island is expected to outpace the provincial average on a number of fronts, including employment growth and home sales.
“The Vancouver Island market is still going to be pretty strong in overall growth,” said Yu, Central 1’s Deputy Chief Economist.
Home prices on the island as a whole are expected to rise about 2 percent per year in both 2019 and 2020. A lot of that growth is likely to be outside Victoria, in some of the smaller markets, like Nanaimo and Campbell River.
What is really helping the island’s economy, Yu explained, is that there has been, and will continue to be, a steady increase in population.
It’s important to note, it’s not just retirees.
“We’re looking to maintain an above average growth of 1.3 to 1.5 percent. That just means that you are going to see a continued flow of people coming to the island of various age groups and that’s going to continue to put pressure I think on overall home prices,” said Yu.
It’ll also help employment growth.
“As long as you have people coming, they build businesses you are going to see economic activity driving the market,” he said.
Major growth in the tourism industry over the last few years has helped the job market.
The growth is slowing, but the industry is expected to maintain the current high level it’s now at.
“The restaurants that are probably quite busy right now, the hotels have very high occupancy rates, that’s going to continue in our view, as long as the Canadian dollar stays relatively low, really being a trigger for those tourism flows,” he said.
Overall, Yu’s take on the island’s economy is a good one.
“I think the island is actually in a very good position right now for the economy and I don’t see that really changing in the short to medium term.”