Harsh 2009 expected before B.C. growth surges ahead
Province
TD Bank predicts that B.C.’s economy will shrink by one per cent next year. Photograph by : Ted Jacob file photo
B.C.’s economy will shrink by one per cent next year but should rebound in 2010 to post nation-leading growth of 3.6 per cent, TD Bank says.
The housing market in B.C. and Alberta is expected to face a harsh climate in 2009 as housing starts fall and sales and prices of existing homes decline, the bank said yesterday.
“Builders have already pared back construction activity in those provinces significantly,” TD said.
“A further leg down is likely for those markets, with the most significant yet to come in B.C.”
Housing starts across the province are expected to tumble by 42.1 per cent in 2009 and another 8.3 per cent in 2010, the bank said.
Average resale house prices in B.C. will fall by 15.6 per cent next year and and 4.3 per cent in 2010, it predicted.
B.C. merchants will face the nation’s toughest conditions next year, according to the bank. The province will post the country’s slowest growth in retail sales in 2009 at a bare 0.5 per cent, TD said.
Virtually all provinces will see their economies shrink next year, with Ontario and Alberta suffering a near two-per-cent contraction and with only Saskatchewan posting any growth at all, at 0.6 per cent, the bank said.
“As Canada slides into recession, no region will be immune,” TD said.
The national economy will contract by 1.4 per cent, more than triple the 0.4-per-cent shrinkage the federal government is now projecting, and the jobless rate soar to 7.7 per cent next year and then 8.2 in 2010, the bank said.
Ontario and Alberta will see their economies contract by 1.8 per cent, and Quebec and the Atlantic provinces by 0.5-to-1.0 per cent, it said. All provinces east of Manitoba will see their jobless rates rise to nine per cent or higher, and all provinces west of Ontario will see jobless rates near six per cent.
“Across the country, government spending will help limit the extent and duration of the recession,” TD said. “But short-term stimulus packages cannot by themselves prevent a recession.”
Nationally, retailers will see revenues rise just 2.5 per cent, and only by two per cent once inflation is stripped out, the bank said.
The good news for consumers is that the cost of living will edge up by a mere 0.5 per cent next year and only 1.6 per cent in 2010, it said.
TD Securities analyst Millan Mulraine suspects the economy contracted by 0.3 per cent in October, following a marginal 0.1-per-cent gain in September, and warned that’s just the start of the downturn.
“In the months ahead, with retailing, wholesaling and manufacturing sector activity all expected to weaken further and the U.S. economic recession continuing unabated, Canadian GDP growth should remain in or near negative territory as the economic recession intensifies,” he said.
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