B.C. economic outlook slow for 2023: credit union group
Posted May 30, 2023 12:34 pm.
Last Updated May 30, 2023 12:35 pm.
A group that represents credit unions in B.C. says the province’s economy is set to slow in 2023, “in line with broader trends.”
Central 1 explains higher interest rates, personal debt, and high home prices will all play a role. It says B.C.’s gross domestic product (GDP) is expected to slow to less than one per cent.
“B.C. economic growth has softened since the latter stages of 2022 with higher interest rates gradually slowing consumer demand,” said Central 1 Chief Economist Bryan Yu.
“Higher interest rates observed over the past year continue to work their way through the economy, and renewal of fixed rate mortgages at higher interest rates will drag on consumer spending. B.C. households are more indebted than peers in other provinces given high home prices, which will take away from other spending. At the same time, strong population growth will contribute to broader growth in the economy.”
Central 1 says while higher interest rates hit the housing market in 2022, it “has shown resilience this year as low listings and demand drivers of a tight labour market and strong population gains have propped up prices.”
Despite this, the group notes prices and affordability remain challenges.
“Housing starts lag resale market conditions and we expect activity to fall back this year despite a clear housing shortage. The trend rebounds in 2024,” Yu explained.
Yu says things will pick up in 2024 and 2025, in part, because of a boost in population and an uptick in major construction projects.
