Click to edit Master title style

Chris Lawless

Chief Economist

British Columbia Economic review & outlook

Presentation to the BC Real Estate Forum

March 30, 2016

Click to edit Master title style British Columbia overview

Province is leading the nation in growth

Economy much more stable…despite commodity slump

Export growth modest

Consumers confident, housing activity leading the way

Non-residential capital investment – some important regional projects underway

Tourism becoming a plus with lower C$

When does commodity cycle turn up?

What happens to the big energy projects?

2

Click to edit Master title style First, a look back...

Shaded areas are Canadian recessions

3

Click to edit Master title style Early ’80s: Western Canada’s Great Recession

4

Click to edit Master title style Boom & bust

5

Click to edit Master title style Roller coaster

6

Click to edit Master title style Why Canada is hurting

7

Click to edit Master title style Commodity prices

Indexes are in US$ terms

8

Click to edit Master title style Population growth

9

Click to edit Master title style B.C. employment & labour income

-2%

0%

2%

4%

6%

8%

2010 2011 2012 2013 2014 2015 2016

10

Year/year percentage change

Source: Statistics Canada

Labour income

Employment

6-month moving average

Click to edit Master title style B.C. manufacturing & exports

-30%

-20%

-10%

0%

10%

20%

30%

2010 2011 2012 2013 2014 2015

Mfg. Sales

Goods exports

11

Year/year % change in $ value, 12-month moving average

Source: Statistics Canada

Click to edit Master title style B.C. commercial & industrial building permits

$150

$175

$200

$225

$250

$275

$300

2010 2011 2012 2013 2014 2015 2016

12

Millions, 12-month trailing average

Source: Statistics Canada

+14% y/y

Click to edit Master title style Retail sales

-6

-4

-2

0

2

4

6

8

10

12

14

2010 2011 2012 2013 2014 2015 2016

13

Percent change in $ value

Source: Statistics Canada

6-month moving average

Click to edit Master title style B.C. motor vehicle sales

Source: Statistics Canada

-15

-10

-5

0

5

10

15

20

25

30

2010 2011 2012 2013 2014 2015 2016

Year/year % change in number of vehicles sold

6-month moving average

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Click to edit Master title style B.C. restaurant & bar sales

-2

0

2

4

6

8

10

12

2012 2013 2014 2015

15

Year/year % change in $ value, monthly

Source: Statistics Canada

6-month moving average

Click to edit Master title style Consumer debt – 2015

-20% -10% 0% 10% 20% 30%

Newfoundland

Quebec

Ontario

Manitoba

Saskatchewan

Alberta

British Columbia

Canada

Bankruptcies Delinquencies*

* Excluding mortgages Source: Equifax Canada 16

Click to edit Master title style B.C. housing starts

15

20

25

30

35

40

2010 2011 2012 2013 2014 2015

’000 units, seasonally adjusted

17 Source: Statistics Canada

6-month moving average

Click to edit Master title style B.C. house prices

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Click to edit Master title style B.C. CPI

-2%

-1%

0%

1%

2%

3%

4%

2010 2011 2012 2013 2014 2015

Total Excl food & energy

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Year/year % change

Source: Statistics Canada

Target

Click to edit Master title style B.C. economic outlook

3.1%

0.7%

-2.4%

2.7% 3.0%

2.5% 2.1%

3.2%

2.4% 2.6% 2.5%

-4%

-2%

0%

2%

4%

6%

2007 2008 2009 2010 2011 2012 2013 2014 '15E '16F '17F

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Percentage change in real GDP

Source: Statistics Canada F: average of largest 5 Canadian banks

Click to edit Master title style Vancouver leads major metro growth

2.8%

3.4% 3.9%

3.3% 3.1%

-4%

-2%

0%

2%

4%

6%

2013 2014 2015 '16F '17F

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Percentage change in real GDP

Source: Conference Board of Canada

Click to edit Master title style External risks

Policy

Shifts

U.S.

Election

Chinese

Financial

Crisis?

• Substantive changes

• Fiscal stimulus

• Impact on economy?

• Divided gov’t continues?

• Democrats retain presidency?

• Republicans retain Congress?

• Debt overhang grows

• Defaults soar

• Contagion spreads

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