The Thompson Okanagan region will continue to a driving force behind B.C.’s overall economic growth in 2017, according to the latest economy forecast from Central 1 Credit Union.
While 2016 growth across the region is reflected in a rising population growth and increased housing prices, that growth has been the most concentrated in the Kelowna metro area.
“For this past year in the Kelowna area, there was about three per cent population growth while overall for the region it was about 1.5 per cent, so it is pretty slack outside of Kelowna and to a lesser extent the North Okanagan,” said Central 1 senior economist Bryan Yu.
Along with population growth, Yu said the Kelowna real estate market remains a strong business activity driver compared to other parts of the region.
“The region as a whole has seen a pickup in housing market activity since coming out of the last recession. There was an oversupply of housing when the recession hit but we are out of that now as the housing markets across the region are more balanced.
“Right now the region is in pretty good shape, coming off a 40 per cent increase overall in building activity in 2016. That should pull back and stabilize a little in 2017 but it will still be an economic driver moving forward.”
But like the rest of the province, resource-based industries have an impact on the Okanagan Thompson region, with the downturn in Alberta’s oil patch having an impact on local job commuters, and the uncertainty hanging over the stalled U.S.-Canada softwood lumber talks.
“The lumber situation is a concern across the Interior for communities reliant on the forest industry, as it looks like there might be some sort of tariff imposed on Canadian lumber exports to the U.S. in 2017 if an agreement isn’t otherwise reached,” Yu said.
But Yu added a potential tariff, depending on the amount, won’t have the same hardship on the industry it might have 10 or 15 years ago, because the industry mills have become more efficient through capital investment, and the ongoing push to open up Asian lumber export markets.
“The industry is in better position to weather any kind of storm and the prospect in the U.S. is for the economy to grow which will see an increase in housing starts, so there will be a need for Canadian lumber to meet that building demand.”
Yu said people and their spending and relocation efforts remaining a key economic flashpoint for the Okanagan Thompson area.
“A big driving force for your region is people and consumer demand. Kelowna has built itself up as a hub for the region and a leading economic urban area for the province,” he said.
“Traditionally, you have seen retirees relocating to the region, but now you are starting to see in Kelowna younger families moving there, attracted by the new job opportunities such as in the high-tech field, to start businesses that service the growing population consumer demands, and as well with the growth in tourism.
“The Thompson Okanagan is not just a resource-based economy anymore, and Kelowna is a leading indicator of that within the region.”
How other B.C. regions fare in Central 1 economic outlook:
* Vancouver Island will continue to enjoy healthy growth, driven by an expanding population and a solid provincial government fiscal position.
* Metro Vancouver will continue to be B.C.’s provincial growth driver, but housing activity will weaken.
Kootenay economic region will see mild growth and unemployment stuck at about eight per cent.
* Cariboo has lost jobs and people in recent years, trends that may stop but not reverse through 2018.
* North Coast and Nechako will continue to suffer lost population and weak employment growth.
*Northeast will see greater stability after a slump in 2016, but conditions will remain a challenge.
SENIOR REGIONAL REPORTER
BLACK PRESS-OKANAGAN VALLEY
Phone: 250-763-3212; 250-878-7575 (cell)