Driving force also to be domestic spending on retail goods, experts say
Derrick Penner
Sun
A surge in retail spending, a 20.9-per-cent boost in planned major-project construction and stable housing growth will help fuel a 3.7-per-cent expansion of B.C.’s economy in 2006, an expert panel told a Vancouver Board of Trade audience Wednesday.
Helmut Pastrick, chief economist for Credit Union Central B.C., forecast another year of solid economic growth in 2006 at the Board of Trade’s 17th annual Economic Outlook forum.
Pastrick said the 3.7-per-cent growth he expects to see in 2006 will follow 3.9-per-cent growth in 2005 and four per cent in 2004.
“The economic outlook for B.C. continues to be robust,” Pastrick said. Growth is to be driven by domestic spending on retail goods and investment in businesses and residential construction.
Pastrick also estimated that the growth will be broadly based, both across sectors and across regions, with industries such as mining and construction showing strong growth.
Pastrick said residential construction might ease in 2006, and though he estimates that real estate sales will show a slight increase over the year, he also wouldn’t be surprised to see property transactions decline slightly from 2005 levels.
Keith Sashaw, president of the Vancouver Regional Construction Association, laid out an optimistic future for B.C.’s construction sector until at least 2010, which he backed up by pointing to some $83 billion in construction intentions listed in the provincial government’s Major Projects Inventory.
Sashaw noted that the most recent inventory figure was calculated at the end of September, and the $83 billion figure came in 20.9 per cent higher than the $68 billion counted on the inventory just six months earlier.
He added that while 56 per cent of the 682 projects on the list are residential construction projects, the rest are spread broadly across other sectors of the economy, “which bodes very well for the construction industry.”
“If you take a look at non-residential investment spending, and this is the real story,” Sashaw said.
While Sashaw expects to new housing construction to level off at the 34,000-units-per-year level, spending on non-residential projects is being ramped up.
They are projects such as the Vancouver Convention and Exhibition Centre, which has seen its budget revised up to $615 million, to $1.8 billion in additions to the Vancouver International Airport and $1.8 billion construction of the Canada Line rapid-transit expansion.
“What we’re seeing is across-the-board increases in commercial, industrial, institutional and government spending,” Sashaw said.
Sashaw spoke at length about the challenges that the construction sector faces in trying to control rising costs and fill shortage of skilled workers that the sector needs to complete all the projects.
Sashaw noted that in greater Vancouver alone, the construction workforce rocketed to some 80,000 workers by the end of November, compared with 60,000 in January, 2004.
© The Vancouver Sun 2006
