British Columbia Economic Outlook Carol Frketich, BC Regional Economist

British Columbia Overview  Strong Domestic Economy  Record Low Unemployment  Real Income Growth  Low Inflation & Declining Interest Rates  Global demand for commodities

Annual growth in real GDP Sources: Statistics Canada, CMHC forecast Western Canada Leads Economic Growth

BC’s Domestic Economy is Strong  Investment  Infrastructure – 228 major projects (over $20 million) started in the Lower Mainland alone – estimated value $53 billion  RAV line - $1.9 billion  Vancouver airport expansion - $1.8 billion  Vancouver convention centre - $883 million  Golden Ears Bridge - $650 million

M&E investment - Mining  2007 Investment in mining exploration reached a record $416 million  Overall, there were 472 exploration stage projects in BC in  Oil and gas rights reached over $1billion in 2007, shattering previous record of $647 million set in Source: Ministry of Energy, Mines and Petroleum Resources # Wells Drilled

Total BC Housing Starts, units Residential Investment adds to growth Source: CMHC Forecast

Renovation and New Construction $ billions Sources: Statistics Canada historical, Canada Mortgage and Housing Corporation forecast (F) New Construction $8.8 billion in 2008 Renovation $7.0 billion in 2008

BC’s Domestic Economy is Strong  Investment  Infrastructure  Machinery and equipment  Residential  Labour Markets  Growth industries

BC’s Tight Labour Market Unemployment rate, per cent Alberta BC Ontario Source: Statistics Canada Annual increase in employment, thousands of jobs

Top Ten BC Growth Industries Industry Growth Growth Construction – other Transportation engineering construction Non-residential building construction Residential building construction Meat product manufacturing Primary & fabricated metal product mfg Warehousing & storage Computer & peripheral equipment mfg Cement & concrete product mfg Electric power engineering construction Source: Statistics Canada, BC Business Council

BC’s Domestic Economy is Strong  Investment  Infrastructure  Machinery and equipment  Residential  Labour Markets  Growth industries  Retail sector  Consumer confidence  Population growth

Consumer Confidence, 1991=100 Source: Conference Board of Canada Consumer Confidence Trending Lower Energy Price Spike US Sub-prime concerns surface

Migration & Population Growth Sources: Statistics Canada and CMHC forecast Net International Net Interprovincial People

Trade Sector Challenges & Opportunities  High C$  US housing slump Thousands of units, SAAR Source: U.S. Bureau of the Census  Port of Prince Rupert  High Commodity prices

US$ index; 1997 = 100; annual average Source: TD Economics Commodity Prices Surged

Consumer Price Inflation, per cent Canada Total CPI Canada Core CPI Source: Bank of Canada Inflation in Canada Trending Lower

Risks to the Outlook

BC Key Economic Indicators FYTD2009F Real GDP (% change) na3.2 Net Migration 48, ,27654,95256,800na56,300 Employment (% change) Unemp. Rate (%) Retail Sales (% change) na4.2na Avg weekly wages (% change) na3.1na $ Exports (% change) na-9.7na Sources: Statistics Canada, CMHC Housing Market Outlook Q2 2008