BC on a roll: 2007 outlook

Look for B.C.'s economy to purr like a cat next year, Business Council of B.C. economist Jock Finlayson says.

Consumer spending and non-

housing construction will help the B.C. economy retain most of the strength it showed in 2006, Finlayson says.

The province's real GDP growth will slow only slightly in 2007 to about 3.5 per cent from this year's four-per-cent growth pace, Finlayson said.

"The slowdown south of the border will trim our growth rate a little," he said. "The outlook is still pretty

positive."

On the down side, exports will be hard-pressed to show any growth next year, thanks to the impact of declining U.S. housing starts on lumber prices.

That could change if natural-gas prices jump, Finlayson said.

If the recent decline in the value of the Canadian dollar continues in 2007, export-dependent industries would benefit, Finlayson said.

Ongoing strength on the domestic side of the economy will offset stagnation or an outright decline in exports, he said.

The capital-spending boom fuelling projects in transportation infrastructure, hotels, pipelines, mines and the 2010 Olympics will be the brightest spot in the economy, he said.

Retail spending is expected to rise by about six per cent in 2007, following a similar increase in 2006.

The jobless rate should average about 4.5 to 4.6 per cent next year, and perhaps slightly lower, Finlayson said.

(prepared by John Luke/Vancouver Province)