B.C. is expected to show a solid economic performance through 2011 despite the country’s slowing growth, says a report released Wednesday.
The Scotiabank forecast said areas that have strong commodity-based economies in the west, east and north of the country will see relatively stronger growth, as compared to places largely dependent on manufacturing.
B.C.’s GDP growth of 2.8 per cent will be supported by strength primarily in coal and copper, and in increased shipping activity. Private sector services are improving and gains are expected in professional and technical services as well as transportation, warehousing and information technology.
“The slower national momentum over the spring and summer is expected to persist into 2011, reflecting a number of factors, including a winding down of inventory restocking, a cooling off in housing activity and a more cautious consumer,” said Scotia Economics economist Alex Koustas.
“Meanwhile, resource-related activity is ramping up alongside strong emerging-market demand for key industrial products, which along with a weaker U.S. dollar, is boosting commodity prices,” said Scotia Economics economist Alex Koustas.
Rising prices for oil and metals will play a role in bolstering certain parts of the country, the report said.
However, the low U.S. dollar, which creates a higher loonie, will also hurt export-oriented factories, which have been key to helping the economy grow in provinces like Ontario and Quebec over the last year, Scotiabank said.
In B.C., copper prices are at very lucrative levels, the report said. There is room for production expansion and an 8- to 10-per cent increase is expected for 2011. Coal production is now back to pre-recessionary levels with a 17 per cent rebound year-to-date. Natural gas assets are expected to attract significant investment in coming years.