Central 1 Credit Union Forecasts B.C. Will Lead Canadian Growth Over the Next Three Years

VANCOUVER, BRITISH COLUMBIA--(Marketwired - June 2, 2015) - British Columbia will lead Canadian economic growth over the next three years as steady but restrained expansion continues, says the latest forecast by Central 1 Credit Union (Central 1).

"B.C.'s economy is showing few ill effects from the recent tumble in oil prices," said Bryan Yu, Senior Economist at Central 1. "Consumers and businesses are benefitting from lower energy prices and interest rate cuts. Meanwhile, the weaker Canadian dollar is boosting tourism, TV and film production, and export demand."

Central 1 has reduced the number of liquefied natural gas (LNG) projects that are expected to proceed during the forecast period due to weaker market conditions, but still expects Pacific NorthWest LNG, led by Malaysia's state-owned Petronas, to move forward. However, investment in the Site C Dam, public transportation and replacements of the Patullo Bridge and George Massey tunnel will spur non-residential investment.

"A rise in U.S. housing activity will lift demand for B.C. forestry products through 2017, but medium-to-long term growth will be constrained by declining timber supplies," Yu says. "B.C.'s mining sector will remain under pressure from low commodity prices."

Interest rates have remained lower than Central 1 forecast in November, which has boosted the new outlook for consumer spending and housing.

Key findings in the forecast include:

• GDP growth is anticipated to reach 2.9 per cent this year, up from 2.6 per cent in 2014, rising to 3.1 per cent in 2016 and 3.3 per cent in 2017.
• Fixed-term mortgage rates are expected to remain low through 2017.
• Interest rates won't rise until late in 2016.
• The unemployment rate will average 5.7 per cent this year, down from 6.1 per cent in 2014, before edging higher in 2016, then declining in 2017.
• The province's population will grow as fewer people leave for jobs in Alberta and more people keep moving here from Eastern Canada.
• House sales are expected to remain strong in most parts of the province.
• Consumer spending will continue to be strong, driving growth.
• Mining investment will remain in a soft patch due to low commodity prices

The full report BC Economic Outlook 2015-2017 is available here.

About Central 1

With offices in Vancouver, Mississauga and Toronto, Central 1 holds on balance sheet approximately $13 billion in assets. We provide wholesale financial products, trust services, investment banking services, payment processing solutions and direct banking services to more than 300 credit unions and institutional clients from coast to coast.

In addition, Central 1 is the primary liquidity manager, payments provider and trade association for our 43 member credit unions in B.C. and 84 Ontario member credit unions. Our members represent a consumer-oriented, full-service retail financial system that collectively serves 3.2 million members and holds more than $97 billion in assets. For more information, visit www.central1.com.