The Conference Board of Canada is the latest research organization to suggest B.C.'s economy will slow in 2023 – specifically due in part to a slowdown in Vancouver.
The Ottawa-based think tank today released its Major Cities Insights report, which it produced earlier this month.
"Reduced purchasing power for consumers and higher borrowing costs for businesses will both have a major hand in dampening GDP (gross domestic product) in Vancouver, which is expected so see growth of just 0.5 per cent in 2023 and 2.8 per cent in 2024," the Conference Board said in a news release.
The finding conforms to past predictions from other experts, and it comes thanks in part to the Bank of Canada raising its policy interest rate at eight straight meetings between March 2022 and January. It then paused interest-rate hikes at March and April meetings.
The Economic Forecast Council, a 13-member council of private-sector forecasters from throughout Canada, said in December that it anticipated that B.C.'s economy would slow to 0.4-per-cent gross domestic product (GDP) growth in 2023, down 2.4 percentage points from 2.8-per-cent growth in 2022, and down 5.7 percentage points from 6.1-per-cent growth in 2021.
While B.C.’s economic growth has been slowing increasing diversification has helped the province be more resilient.
B.C. has long had a more diversified economy than Alberta, but its level of diversification among provinces has been middling – fifth out of 10, according to data collector BC Stats.
Fast growth in sectors such as technology and film production has helped resource-rich B.C. diversify its economy, hedge against commodity-price downturns and be better able to weather adversity.
Royal Bank of Canada (RBC) (TSX:RY) regional president for B.C. Martin Thibodeau told BIV earlier this month that demand for loans from technology firms and film-production ventures has been growing, and is strong.
The film sector in recent weeks has been hit with a slowdown thanks to the ongoing Writers Guild of America strike, but industry insiders have told BIV that they expect the strike to be a blip in the long-term growth of the sector in the province.
“Our tech business is growing – tech and clean tech is growing exponentially,” Thibodeau said. “Our film industry [lending] is very, very strong. We have a huge health-care practice at RBC, serving all healthcare professionals, like dentists and doctors, and any professionals. It is really growing, so there is demand there.”
He said that the value of his bank’s outstanding business loans in B.C. has increased 17 per cent year over year at the end of March. In March 2022, the annual business loan growth rate was 20 per cent.