B.C. caught in recession downdraft, economist says
A report by the voice of B.C. credit unions predicts more than 42,000 jobs will be lost in British Columbia this year as a recession unfolds in the provincial economy.
The economic forecast for 2009 to 2013 suggests that declining construction and business investment, along with weak consumer spending and recessions in forestry and housing, will cause an economic contraction in 2009.
Central 1 Credit Union chief economist Helmut Pastrick said Thursday the province can't avoid the downdraft of the global economic recession.
Pastrick said he is hopeful the global economy will start to recover by next year.
"In B.C. we do have the 2010 Winter Olympics, which does provide a injection of money into the economy in the order of perhaps a billion dollars," he said.
But the report calls the Olympics a temporary economic boost, with growth forecast to slip back slightly in 2011 before the economy begins growing again, reaching four per cent in 2013.
"The forecast assumes that the global monetary and fiscal policy stimulus actions yield results and begin to show a positive impact on the real economy," Pastrick's report cautions.
The report also says the province will see the first consecutive annual declines in employment since British Columbia was last plunged into a recession, in 1982-83.
"For the first time in a decade, B.C.'s economy needs fewer workers," the report says. "Total employment during 2009 falls 1.8 per cent, or 42,500 persons in this forecast."
Consumer price inflation is expected to drop to less than one per cent this year because of a sharp decline in energy costs and lower interest rates.
British Columbia has had four recessions since 1961, with the longest downturn starting in 1981.
Most postwar recessions in Canada and the United States last an average of 10 to 11 months, but this downturn is predicted to be longer.
"The beginning of B.C.'s recession was probably the fourth quarter of 2008 or the first quarter of 2009 at the latest," the report states.
"The recession's low point is still ahead, and the economic fallout is accelerating."