The Conference Board of Canada says British Columbia is expected to lead the country in economic growth this year.
B.C.’s gross domestic product is expected to grow by 2.7 per cent in 2016.
The forecast comes as weak oil prices are expected to continue to weigh on Alberta, Saskatchewan and Newfoundland and Labrador.
The Conference Board said aside from B.C., only Ontario, Manitoba and Nova Scotia are expected to grow by more than two per cent.
Victoria’s diverse economy — driven by high-tech, tourism, shipbuilding, government and post-secondary education — is expected to keep pace with the province’s growth rate.
Bruce Carter, chief executive of the Greater Victoria Chamber of Commerce, said the region should come in around the 2.5 to 2.7 per cent growth range.
He expects the strength of the U.S. dollar will play a big role in helping the tech and ship-repair sectors, while an improving U.S. economy will result in strong a strong flow of visitors this summer and more meeting and conference business from south of the border.
Carter said education and government should see relatively flat growth this year, while construction in both residential and commercial corners will be busy.
“It looks great on all levels, and we have the labour market available because fewer people are flying to Fort McMurray [to work in oil and gas],” Carter said.
The labour question, however, is going to play a role in governing growth of the region’s tech sector.
“Opportunity is not slowing us down, it’s finding the right talent quickly enough that is our biggest hurdle,” said Dan Gunn, chief executive of the Victoria Innovation, Advanced Technology and Entrepreneurship Council. “That’s not new, but it comes more into focus when the industry has such potential and growth in front of it.”
Gunn said the industry is in a very strong position, in part because as an export-focused industry the low Canadian dollar provides a temporary advantage.
“We pay people in Canadian dollars and sell product in U.S. dollars,” he said, adding that even without a dollar advantage tech companies have been speaking enthusiastically about the year.
“They are saying things are very good and they have big expectations both on the hiring front, if they can find the right people, and then on the revenue-growth side,” Gunn said. “It’s been typical to hear CEOs saying they are expecting 25 to 30 per cent revenue growth this year, and in recent years 12 to 15 per cent has been considered a conservative, light year.”
There is concern in tech with the rising cost of Victoria real estate.
“We are watching carefully how to get more talent, and we’re getting a lot more interest from places like Vancouver, but we are concerned about the upward pressure on real estate pricing because of that Lower Mainland interest,” he said. “One of the big advantages we have [to recruit talent] is a better lifestyle and more affordable lifestyle.”
Paul Nursey, chief executive of Tourism Victoria, said the tourism industry is predicting topline accommodation growth — its most accurate metric — will increase between three and four per cent this year. He expects strong visitation from its major markets — Vancouver and the Pacific Northwest — and steady growth from Europe and Asia, with the soft spot expected to be Alberta.
The Conference Board’s report said Ontario is projected to grow by 2.4 per cent, as the lower Canadian dollar and U.S. consumer demand is expected to help boost exports. Al-berta is forecast to contract by 1.1 per cent in 2016 following a 2.9 per cent pullback last year due in large part to the slump in oil prices.
Saskatchewan is expected to creep ahead by 0.7 per cent after a contraction of 2.8 per cent in 2015.
In B.C., the goods and service industries are forecast to grow strongly. That is expected to encourage more Canadians — particularly those in the oil-producing provinces — to move to the province.
B.C.’s outlook for job creation is also bright, with employment forecast to grow by 2.2 per cent, up from 1.3 per cent last year. Accordingly, the unemployment rate is expected to dip below six per cent in 2017. The B.C. forecast includes Petronas’ $36 billion Pacific NorthWest liquefied natural gas terminal. However, there is uncertainly as to if and when construction of the project will begin.