Greater Victoria’s economy is expected to pick up and top two per cent growth in gross domestic product this year, according to a new forecast from the Conference Board of Canada.
The moderate spurt will boost the capital region to eighth place, up from dead last in 2014, among the 13 major cities surveyed for the annual spring Metropolitan Outlook. Last year, Greater Victoria’s growth was pegged at just 0.2 per cent. Saskatoon was in first place with 6.1 per cent.
After weathering three years of flat or stagnant increases, the capital region is facing a brighter financial picture, said the report.
“As a provincial capital, Victoria has been hard hit by fiscal restraint. The local economy has grown little in recent years, but things are looking up,” said Alan Arcand, associate director of the Centre for Municipal Studies, which produces the study.
Greater Victoria’s real gross domestic product (the value of all goods and services produced) is set to rise by 2.1 per cent this year, the report said. It will be the first time growth is higher than two per cent since 2007, the year prior to the global financial crisis and start of the recession.
Regional housing starts are expected to rise by 13 per cent this year, the report said, with increasing employment driving housing demand.
Wholesale and retail trade is predicted to increase by 3.2 per cent. Strong performance in the manufacturing sector, particularly at Victoria Shipyards and the Esquimalt Graving Dock, will help push the GDP higher, the report said.
The capital region’s economic growth is forecast to continue expanding into 2016, by 2.3 per cent, the report said.
Beyond that, Greater Victoria’s economy is anticipated to climb by 2.5 per cent in 2017. Expansion is predicted to slow to two per cent in 2018 and 1.7 per cent in 2019.
“It’s very good to see a forecast that is showing some good, strong positive growth,” said Bruce Carter, Greater Victoria Chamber of Commerce chief executive. “I think that will be very positive for the region and for consumer confidence in the local economy.”
Construction and new housing starts are helping fuel expansion, Carter said.
The report anticipates now that the provincial government has balanced its books, it will increase spending and hire more public servants.
Carter said that he is not expecting new jobs to be created. Instead, he expects to see jobs filled as public servants, including those in top positions, retire from the workforce.
Some public servants delayed retirement for up to five years and are now starting to leave, Carter said. This will create a flow of new employees into the public service.
The new hiring will give work to local training businesses, which have had a tough time, Carter said.
Carter and the board agree that tourism is heading into a strong summer. The weaker loonie in comparison to the U.S. dollar will help attract visitors and fill hotel rooms. That will translate into higher staffing at tourism-related businesses, Carter said.
The dollar difference can also help other sectors. Carter said a yacht broker told him that five recent sales of Canadian boats went to U.S. buyers.
On the other hand, the dollar difference may lead to American firms trying to scoop talent from Greater Victoria employers, Carter said.
