23 April, 2019

Vancouver Economics Market Overviews, Winter 2019

Economic Indicators – Vancouver

2016 2017 2018 2019F 2020F 2021F 2022F 2023F
Real GDP at Market Prices ($2007 millions) $131,028 $136,772 $140,134 $143,590 $147,097 $150,428 $153,698 $157,329
      Annual Growth (%) 4.0% 4.4% 2.5% 2.5% 2.4% 2.3% 2.2% 2.4%
Total Employment (000s) 1,359 1,401 1,426 1,453 1,464 1,487 1,504 1,527
      Annual Growth (%) 4.7% 3.1% 1.8% 1.9% 0.7% 1.6% 1.1% 1.5%
Unemployment Rate (%) 5.4% 4.6% 4.3% 4.3% 4.5% 4.5% 4.5% 4.5%
Household Income per Capita ($) $47,089 $48,579 $50,267 $51,737 $53,196 $55,049 $56,710 $58,464
Population (000s) 2,542 2,571 2,603 2,633 2,663 2,696 2,733 2,774
      Annual Growth (%) 1.3% 1.1% 1.2% 1.2% 1.1% 1.3% 1.4% 1.5%
Total Housing Starts 27,914 26,204 23,404 21,548 20,436 19,577 19,622 20,175
Retail Sales ($ millions) $37,573 $40,268 $40,424 $41,559 $43,147 $44,979 $46,681 $48,521
     Annual Growth (%) 8.8% 7.2% 0.4% 2.8% 3.8% 4.2% 3.8% 3.9%
CPI Annual Growth (%) 2.2% 2.2% 3.1% 2.4% 2.0% 2.0% 2.0% 2.0%
F = Forecast data.
Source: The Conference Board of Canada, Metropolitan Outlook I, Winter 2019.

 

Key Highlights

Notable highlights regarding Vancouver’s economic environment are provided below and have been sourced from The Conference Board of Canada’s Winter 2019 Metropolitan Outlook I report:

  • Real GDP growth in Vancouver is forecast to remain moderate and stable over 2019 and 2020 with expected growth of 2.5% and 2.4%. The region’s cooling housing market has had a major impact on its economy and will slightly lag that of the province which is forecast to expand by 2.7% and 2.4% over the next two years.
  • In line with the overall economy, job growth in Vancouver is expected to be modest with gains of 27,200 and 10,600 new jobs in 2019 and 2020. An aging population and continued job growth is anticipated to keep the unemployment rate steady at 4.3% in 2019 before rising and holding at 4.5% through to 2023.
  • As a result of increased provincial housing measures and tighter federal mortgage regulations, FIRE industry growth fell to a record low of 0.8% in 2018. The industry is expected to recover and rise by 3.1% in both 2019 and 2020.
  • The professional, scientific and technical services industry is projected to lead Vancouver’s economy with growth of 3.7% and 4.0% in 2019 and 2020. The strong growth is expected to spur employment gains in this high-paying industry as well.
  • Consumer spending continues to face pressures from slower employment growth, higher interest rates, elevated household debt and a softer housing market. As a result, retail trade industry growth is expected to rise by 3.4% in 2019 before averaging an annual rate of 2.5% to 2023.
  • The transportation and warehousing industry, a significant driver of Vancouver’s economy, is expected to remain healthy with growth of 3.4% and 2.5% in 2019 and 2020.
  • Coming off of last year’s record increase of 7.6%, growth in the health care industry is forecast to expand by another 2.4% in 2019 as an aging population spurs increased government spending in the industry.
  • Following the robust growth recorded over the past few years, the manufacturing industry is forecast to moderate to more sustainable increases of 2.6% and 2.4% in 2019 and 2020. Notable projects include Seaspan’s multiple major shipbuilding contracts and construction of STEMCELL Technologies’ new biologics manufacturing facility.
  • Housing starts are projected to gradually fall over the next few years due to higher interest rates and government regulations. As a result, 21,500 and 20,400 units are anticipated in 2019 and 2020.
  • Non-residential construction is expected to remain active with notable projects including construction of the G3 Terminal Vancouver, a new $600.0 million material handling facility, a $130.0 million container and logistics facility, the $500.0 million Burrard Place mixed-use development, the $1.4 billion Pattullo Bridge replacement, the $5.6 billion Vancouver International Airport expansion, the $2.5 billion Brentwood Town Centre redevelopment and the $2.8 billion, 5.7-kilometre Broadway Subway line.

By: The HTFG