Presentation is loading. Please wait.

Presentation is loading. Please wait.

A B.C. Growth Revival and What it Means for the Southern Interior Southern Interior Local Government Association Penticton, B.C. April 30, 2014 Bryan Yu.

Similar presentations


Presentation on theme: "A B.C. Growth Revival and What it Means for the Southern Interior Southern Interior Local Government Association Penticton, B.C. April 30, 2014 Bryan Yu."— Presentation transcript:

1 A B.C. Growth Revival and What it Means for the Southern Interior Southern Interior Local Government Association Penticton, B.C. April 30, 2014 Bryan Yu Regional Economist Central 1 Credit Union

2 Global economy still limping along, growth accelerates in recent months Index Source: Bloomberg, C1CU JP Morgan Global Manufacturing PMI Contraction Expansion

3 U.S. growth a subdued 1.9% in 2013 but strong hand-off to 2014 Per cent change at annual rate Source: U.S. Bureau of Economic Analysis Latest : Q4-13 U.S. Economic Growth  Housing market recovering  Credit constraints ease  Consumer Deleveraging cycle  Business spending strengthens on underlying demand  Shale revolution  Interest rates remain low  Lower fiscal drag on bipartisan budget deal

4 Labour market conditions improve, but weakness persists Source: U.S. BLS, BEA Persons (mil.) Per Cent U.S. Payroll EmploymentLabour Market Tightness Persons (000s)Per Cent

5 Key consumer spending sectors reviving Source: U.S. BEA. Note: Seasonally adjusted at annual rate. Latest: Nov-13 Units - millions $ (bil) U.S. New Vehicle SalesU.S. Real Retail Sales

6 Housing market recovering Source: Federal Reserve, Central 1 Credit Union, seasonally adjusted price. Per Cent Index (2005=100) Rental Vacancy RatesU.S. Home Prices $205k

7 Housing starts rebalancing after decade of overbuilding Source: Federal Reserve, C1CU

8 Income and Net Worth Recovering Source: U.S. BLS, BEA Per Cent $ T Real PDI GrowthHousehold Net Worth

9 Largest output gap in 60 years and housing starts lowest in more than 50 years U.S. Output Gap (per cent of GDP) Source: U.S. BEA, US Census Bureau, CBO. Latest: Q4-13 U.S. Starts Per Capita

10 Key External Economic Forecasts Indicator U.S. real GDP, % chg U.S. housing starts, % chg Japan GDP, % chg China GDP, % chg EU GDP, % Canada real GDP, % chg Source: U.S. BEA, Statistics Canada, Consensus Forecasts, C1CU. U.S. cyclical recovery to gain momentum, Canadian economy lags

11 Canadian inflation near 1%, consistent with BoC expectations but still below target Year-over-vear per cent change Source: Statistics Canada, C1CU. CPI Price Inflation

12 BoC begins raising rates in mid 2015 Per cent Source: Bank of Canada, C1 Economics. Note: Annual average. Latest actual: Interest Rates, Actual and Forecast : Canada

13 Decline in Canadian Dollar to lift competitiveness and exports CDN in USD Source: Statistics Canada, C1CU. Average weekly data Latest actual: Feb 12/14 Daily Exchange Rate Exchange Rate Outlook CDN in USD

14 Transition year for B.C. economy in 2014 and gains in 2015 onwards Per cent change in GDP Source: Statistics Canada, C1CU. Latest actual: Forecast: B.C. Economic Growth, Actual and Forecast

15 B.C. Economic and Housing Forecasts Indicator Real GDP, % chg Nominal GDP, % chg Employment, % chg Unemployment rate, % Population, % chg Housing starts, (000s) Source: Statistics Canada, CMHC, C1CU. Transition year for B.C. economy, economic momentum picks up in 2015 onwards

16 Labour market performance dismal year in 2013 but signaling modest improvement Persons - millions Source: Statistics Canada, C1CU. Latest: Mar-14 B.C. Employment 2013 Growth Performance

17 Population growth sluggish as residents flow to Prairies SOURCE Statistics Canada Central 1 Credit Union) Per Cent Persons (000s) Population Growth Migration Flows

18 Housing will not be a growth driver for economy SOURCE CMHC, Statistics Canada Central 1 Credit Union Units (000s) Percentage change Housing Starts Real Residential Investment

19 Exports cycling higher in 2014 with broad gains across sectors Dollars - billions Source: Statistics Canada, C1CU. Note: Seasonally adjusted. Latest: Feb-14 B.C. International Merchandise Exports Growth (%) YTD 2014 Total Exports Excluding Forestry Forestry Agriculture Energy Metal ores/ minerals

20 Export growth to outpace import gains until 2017 Per Cent Source: Statistics Canada, C1CU. Proportion of International Goods Exports 2013 U.S. Japan China S. Korea Other ‘97-’07 64%. 14% 3% 15%

21 B.C. forestry sector in recovery mode on higher demand and prices SOURCE: B.C. Stats, Random Lengths Central 1 Credit Union (updated Feb 2014) Index (2010=100) $/1000 bd ft Lumber ActivityLumber Price

22 Exchange rate sensitive sectors to experience boost SOURCE Statistics Canada Central 1 Credit Union) Per Cent Persons (000s) Hotel Occupancy Rate Canada-US Auto Flows

23 Got Gas? High growth contingent on LNG

24 Investment and Exports to lead economic growth Per cent change Source: Statistics Canada, C1CU. Latest actual: Forecast: Growth by Expenditure Account

25 Employment trending higher in Thompson- Okanagan but still trends weak Persons – thousands Source: Statistics Canada, 2013 YTD Thompson-Okanagan Employment Region THOK-2.9% Kelowna CMA-2.4% Kamloops CA-4.8% Annual Growth 2013/12

26 Population flat since 2009 Persons – thousands Per cent Source: Statistics Canada. Note: As of July 1, latest data preliminary. Thompson-Okanagan Population

27 Positive gains in Kelowna CMA, net outflow in other areas Source: BC Stats, C1CU. Latest: Growth

28 Interprovincial migration by age group SOURCE Statistics Canada Central 1 Credit Union Persons Migration Flows

29 Intraprovincial migration by age group SOURCE Statistics Canada Central 1 Credit Union Persons Migration Flows

30 Home sales accelerate in 2013 but stay low SOURCE: Landcor, Latest: 2013, resale properties * includes rural – updated Feb/14 Units Annual Sales* Annual 2013 Growth (%)

31 Home prices level in 2013 Index 2005=100 Source: Landcor, Central 1 Credit Union $ ’09 -’13 0% $ % $ % $ % $ %

32 Housing market oversupply persists, excesses unwind CDN in USD Source: Statistics Canada, C1CU. Average weekly data Latest actual: Feb 12/14 MLS® sales-to-active listings ratios Unabsorbed new home inventory 2002=100

33 Thompson-Okanagan building permit activity $ (mil.) Source: BC Stats. Latest: 2013 Non-Residential Permit Volume Residential Permit Volume $ mil.

34 Municipal tax revenue growth slows since recession $ millionsPer cent Source: B.C. Ministry of Community, Sport and Cultural Development. Latest 2013 Thompson-Okanagan municipalities

35 THOK Q4 Major Project Capital Costs $ millions Construction StartedProposed Total 16,449 6,402 COMMERCIAL19035 EDUCATIONAL SERVICES HEALTH CARE & SOCIAL ASSISTANCE36780 MINING4751,734 RESIDENTIAL3,3572,024 RESIDENTIAL MIXED USE1,75550 RESORT5, TRANSPORTATION & WAREHOUSING1, UTILITIES1,2721,521 PUBLIC ADMINISTRATION272 Source:: Ministry of Jobs, Tourism and Skills training and Labour C1CU

36 Alberta swagger to boost regional activity Per Cent Source: Statistics Canada. Note: Seasonally adjusted. Latest: 2013 Unemployment Rate Weekly earnings growth (%) Housing Price Growth(%)

37 Okanagan housing market more favourable with lower Canadian dollar and rising U.S. prices $CDN Source: Landcor, NAR, Statistics Canada, Central 1 Credit Union. Latest: Dec-13 U.S. West – Thompson Okanagan Price Differential Exchange Rate Adjusted Price differential tilted in favour of U.S. from

38 Seniors share of local population high in a Okanagan market Source: Statistics Canada, NHS, 2011

39 Thompson –Okanagan Forecast (% change) LabourEmployed Unemployment Rate Population Resale Housing Transactions Med. Price Source:: Statistics Canada, Landcor, C1CU

40 Housing market improves but levels remain low Units– thousands $ - thousands Source: Landcor. Note: forecast

41 KEY POINTS B.C. economy in cyclical growth recovery led by external factors Consumer demand weighs on poor labour market performance and weak housing market growth Southern interior under additional weight of mid-decade housing and tourism bust, excess housing stock Goods exports and tourism exports in the region to improve over forecast period Housing oversupply alleviation, Alberta Swagger, retirees, and less incentive to buy U.S. property to drive local economy

42 THANK YOU Bryan Yu Economist Central 1 Credit Union

43 Our Core Purpose: Successful Credit Unions


Download ppt "A B.C. Growth Revival and What it Means for the Southern Interior Southern Interior Local Government Association Penticton, B.C. April 30, 2014 Bryan Yu."

Similar presentations


Ads by Google