Conference Board scales back outlook for city's economic growth

The bloom on Prince George's economic rose has withered, according to the Conference Board of Canada.

In a report released this week, the Board predicted the city's real gross domestic product will grow by 1.5 per cent this year and edge up to 1.8 per cent in 2018.

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That's down from the 2.8 per cent predicted for 2017 in last year's edition, when the Board said the Prince George will enjoy the strongest economic growth among the seven mid-sized cities covered.

This year, the honour goes to Medicine Hat among eight communities included in the report. The Alberta community is expected to grow by 2.7 per cent this year and 2.0 per cent in 2018.

Prince George is tied for fifth with Timmins, Ontario.

In making the prediction for Prince George, the Board concentrated on uncertainty in the forestry sector.

"On the one hand, a healthy U.S. economy and recovering housing market will increase demand for B.C. wood products," the Board said.

"On the other hand, the ongoing negative impact of the mountain pine beetle on wood supply, the imposition of tariffs on softwood lumber entering the U.S., and a struggling mining sector will keep primary and utilities output growth in check."

Even at 1.5 per cent, the city's growth will still be "decent," according to the Board.

Between 2012 and 2016, Prince George averaged 2.2-per-cent growth, then the pace slowed to a "still-healthy" 1.8 per cent in 2016, the Board said.

"Unfortunately, Prince George's job market has not shared in the recent economic gains," the Board added. "Employment fell at an annual average pace of 0.6 per cent between 2011 and 2016 - a net loss of 1,400 jobs.

"Fortunately, the outlook is bright; we forecast total employment will expand by five per cent this year and 1.2 per cent next year, largely erasing an 8.2-per-cent contraction in 2015. However, with more people entering the labour force, we expect the unemployment rate to rise to 6.9 per cent this year before easing to 6.4 per cent in 2018."

As of June, the city's unemployment rate stood at 5.9 per cent according to a Statistics Canada labour market survey.

Melissa Barcellos, the city's economic development manager, noted that while the rate of growth has been declining over the past seven years, it has remained positive, creating a "snowball effect" as percentages pile on percentages.

"While we're seeing other communities grow at a faster rate, we're maintaining that growth that we've seen steadily over the last few years," Barcellos said. "So overall, I think this is positive. It shows that Prince George has a steady economy, that we aren't a boom and bust city."

Thanks to a strong housing market, the Board said finance, insurance and real estate are expected to be the fastest growing sector in the city this year.

She said the outlook is used to both support existing businesses and attract new ones to Prince George.

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