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Forecasts brighter for BC in 2010 | December 04, 2009
Jobless rate drops | October 14, 2009
Number of jobless receiving EI doubles | June 5, 2009
First-quarter housing starts far from robust | April 13, 2009
City weathering economic downturn: chamber | February 16, 2009
Aging population to lower B.C.'s economic performance | February 7, 2009
Expect $40 billion Federal deficit | January 17, 2009
FV real estate | December 2, 2008
Housing starts and prices for commodities such as lumber are showing signs of recovery.
Forecasts brighter for BC in 2010
VICTORIA – B.C. is emerging from its economic slump with a small improvement in growth projections for 2010, according the latest report from the B.C. Economic Forecast Council.
Finance Minister Colin Hansen says the average growth projection of 2.9 per cent for 2010, up from 2.5 per cent projected in September, is mainly a result of increased housing starts, along with higher metal and commodity prices.
"Our economy is beginning to show signs of stability," Hansen said after releasing the council's latest findings Friday.
He said the bank economists and other experts on the council reinforced his earlier warnings that the situation remains volatile. Major risks to the B.C. recovery are a stronger than expected Canadian dollar, slow global demand for B.C. experts and a U.S. economy that continues to struggle.
With 2009 coming to a close, council members estimated that B.C.'s economy would finish the year between two and three per cent smaller than 2007. One of the more optimistic members is Marie-Christine Bernard of the Conference Board of Canada, who forecasts that after a two per cent decline this year, B.C. will see a 4.2 per cent in real gross domestic product in 2010, in part due to hosting the Olympics.
On the pessimistic side is Jock Finlayson of the B.C. Business Council, projecting a three per cent decline for 2009 and growth of only 2.8 per cent for 2010.
Employment growth lags behind economic recovery. B.C.'s seasonally unemployment rate was 8.3 per cent in November, unchanged from October, according to Statistics Canada's labour force survey.
Regionally, the lowest jobless rate was 5.8 per cent in the Northeast where natural gas development is booming. The highest was 12 per cent in the Cariboo.
Compared to the same month in 2008, the Thompson-Okanagan job market improved while all other regions continued to see job losses.
Jobless Rate Drops
The number of people working increased and unemployment fell in September, providing more evidence the recession is turning to recovery.
Metro Vancouver’s unemployment rate fell to 7.1 per cent in September, from 7.3 per cent in August, according to Statistics Canada.
The Fraser Valley (Abbotsford census metropolitan area) edged down a tenth of a point to 8.9 per cent.
B.C.’s jobless rate fell from 7.8 per cent to 7.4 per cent in September.
The province has gained 30,000 jobs since employment levels bottomed out in March.
Nationally, unemployment dropped from 8.7 to 8.4 per cent.
The improvement surprised Central One Credit Union economist Helmut Pastrick, who had predicted it would be a number of months yet before the jobless rate peaks and starts to fall.
The unemployment rate typically keeps rising in the early stages of a recovery, because jobless people who had given up looking for work re-enter the labour market when they think prospects have improved.
“As they dropped out during the recession as job opportunities diminished, the reverse tends to play out when job opportunities improve,” Pastrick said.
Home builders are also busier after a deep slump in construction activity triggered by the global financial meltdown.
CMHC market analyst Robyn Adamache said a rebound in residential construction that began in August appears to be extending into the fall.
The Metro Vancouver region saw a combined total of 858 new home starts in September, CMHC reported.
A total of 5,644 new units have been started in Metro Vancouver in 2009.
That’s down 64 per cent from the more than 15,000 starts for the same nine months of 2008, but Adamache expects continued improvement into 2010.
Surrey has led the region so far, with 1,504 new homes started, more than half of them single-family houses. Vancouver has 1,120 starts (three quarters are multi-family units), followed by Burnaby with 550 starts.
Number of jobless receiving EI doubles
The number of jobless people receiving employment insurance benefits has more than doubled in the Lower Mainland over the past year.
Statistics Canada figures released recently show there were 35,470 people on EI in Metro Vancouver in March – up from 15,030 in the same month in 2008.
The Abbotsford census region has also more than doubled, from 1,830 EI recipients in March 2008 to 4,130 in March 2009.
Across B.C. there are now 82,200 people receiving regular EI benefits, up 26.7 per cent from March to February.
That’s significantly higher than the 10.6 per cent national increase from February. Since October, the number of B.C. EI recipients has climbed 80 per cent.
Construction, manufacturing, trade, forestry and logging, and transportation and warehousing are all heavily affected sectors.
First-quarter housing starts far from robust 2008
New housing starts in Abbotsford and Mission plummeted by 89 per cent from January to March this year, compared to the first quarter of 2008.
The statistic is just one of the figures released last week by the Canada Mortgage and Housing Corporation (CMHC).
When comparing March 2009 to March 2008, the agency also reported that construction on new homes in the two local communities dropped by 96 per cent. The vast majority of that came from a fall in new apartments and townhouses.
CMHC spokeswoman Carol Frketich said Abbotsford and Mission are “following the trend” of much of the rest of B.C.
To put the numbers into context, she pointed out that the first quarter of 2008 saw some record growth in terms of the region’s construction projects. That being said, she acknowledged the numbers for 2009 have dropped markedly.
From January to March this year, the CMHC said Abbotsford and Mission saw the start of 47 new housing projects compared to the 435 that broke ground during the same period in 2008.
The situation is not much rosier in other areas of the Lower Mainland.
Chilliwack’s housing starts for the first quarter dropped 85 per cent, while Greater Vancouver communities saw an average fall of 54 per cent.
The worst hit cities were Surrey with 222 new builds for the first quarter of 2009 compared to 1,674 in 2008, Coquitlam with 37 compared to 237, Richmond with 111 compared to 307, and Vancouver with 541 compared to 1,493.
According to Frketich, the stumbling economy and softening job market has had an impact on housing demand. That has translated into fewer new building projects throughout the region, she said.
In Abbotsford, Jay Teichroeb, the city’s economic development manager, said the $8.7 million in new housing starts for the first quarter of 2009 compares to $52 million in new housing from January to March last year.
Most of that difference has been in apartments and townhouses, he said.
With the real estate market slowing, and with a glut of multi-family complexes being built last year, Teichroeb said some of those units still need to be “absorbed into the market.”
That is now happening, he said, partly thanks to a drop in prices.
It is impossible to predict what will happen to Abbotsford’s housing market in the long-term, said Teichroeb, with much depending on the economics of North America and the rest of the world.
“But we are at the front edge of the wedge in terms of where future growth is happening, because it is pushing into the Fraser Valley,” he said.
With the City of Abbotsford encouraging densification, Teichroeb also suspects that the future of new housing in Abbotsford lies in more affordable townhouses and apartments rather than single-family developments.
City weathering economic downturn says chamber
While the world continues to struggle with the ramifications of the economic downturn, B.C. – and Abbotsford in particular – seems to be weathering the storm better than most jurisdictions.
While everyone admits that times are tougher than they were, local businesses are not pushing the panic button.
“At the mid-point of January, it was absolutely terrible, but sales picked up in the final two weeks,” said Brian Lee, owner of Lee’s Fine Jewellery.
“Our sales were almost identical to last January,” he added.
Considering the predictions of a downturn, Lee says having the same amount of sales as last year has to be considered a success.
Other businesses are telling a similar story.
“We did have better sales in January. Not double digit growth, but I’ll take it,” said Gerri Charles of Champagne & Lace.
According to Charles, having an established clientele and a reputation certainly helps.
“I see it as an experience issue. You have to earn the business you get and we appreciate that business,” she added.
And she says that her company isn’t doing anything different than normal. They aren’t holding blowout sales or enticing people in with bold claims.
“No one is recession-proof, but sometimes you have to lower your head and do what you do best to be successful,” said Charles.
Good news stories from the world of retail are hard to come by at this moment in time.
David Hull, executive director of the Abbotsford Chamber of Commerce, says that all the bad news flooding the airwaves is kind of like the story of Chicken Little.
“The economy is falling, the economy is falling,” he said.
“It is not all doom and gloom in Canada, but like Chicken Little we are talking ourselves into the proverbial poor house.”
Hull added that “prophesying economic doom is a lot like having some minor physical ailments. After a couple of hours you think you’re on your deathbed.”
“There’s a lot of good news out there if you just look,” he added.
According to Hull, agriculture is a huge factor in Abbotsford’s apparent success. The chamber has conducted a study of the agriculture industry. While the results won’t be released until next week’s Pacific Agriculture Show, Hull was willing to reveal some of the findings.
“According to our study, agriculture has a $1.8 billion economic effect on Abbotsford,” he said.
That means one in five jobs in Abbotsford can be directly affected by agriculture added Hull.
The report is so positive that Hull says the chamber will “declare ourselves the agriculture capital of Canada.”
With more turmoil predicted the Valley seems the place to be.
“If I had to be anywhere in Canada right now, I would be in Abbotsford,” said Hull.
Aging population to lower B.C.'s economic performance: Conference Board
The Conference Board of Canada says B.C.'s aging population will bring about significant economic changes in the province.
B.C.'s population is expected to age significantly over the next 20 years, according to Conference Board president and CEO Anne Golden.
"The share of the population aged 65 and over was 14 per cent last year; it's going to grow to be 25 per cent of this province by 2030," Golden said Friday at an economic conference in Vancouver.
As B.C.'s population ages, economic growth in the province is expected to slow significantly, she said.
"B.C. will have one of the oldest populations in the country," Golden said. "As a result, there will be a consistent slowing in labour force growth [and] this, in turn, will steadily lower B.C.'s economic performance."
Golden predicts the province will face a labour shortage of 160,000 workers by the year 2015.
That means B.C. needs to create policies to increase its supply of workers by encouraging the participation of youth, immigrants, women, mature workers, aboriginal people and the disabled in the workforce, Golden said.
The Conference Board of Canada is an Ottawa-based independent, non-profit research organization that focuses on economic forecasts and public policy.
Up to $40 billion deficit in once-in-a-lifetime crisis
Canadians can expect the minority Conservative government to announce it will run a deficit of up to $40 billion in the 2009-2010 financial year to help stimulate the economy.
Abbotsford MP Ed Fast made that projection on Thursday, as the nation awaits the budget speech to be delivered by Finance Minister Jim Flaherty on Jan. 27.
Fast is predicting that his party will operate a deficit of between $30 billion and $40 billion for the coming year.
It will then be a case of balancing infrastructure spending with providing tax reductions, Fast said. The government will also be looking to fund training initiatives to help people who have lost their jobs as a result of the economic crisis, he added.
“As Conservatives, we typically stay away from deficits, but these are extraordinary times and they call for extraordinary measures,” Fast told the Abbotsford News.
“This is a crisis that we may only face once in a lifetime and there seems to be consensus around the world that deficit budgets, on a temporary basis, are the tool that’s necessary to get the world’s economy going again.”
Fast stressed the word “temporary,” and said Prime Minister Stephen Harper has made it “crystal clear” that he does not want to see annual deficit spending.
The minority Conservative government will likely need at least one of the opposition parties to support its budget plans to remain in power.
If that does not happen, it could potentially see the nation return to the polls, or prompt the opposition parties to band together and attempt to form a coalition government.
On the budget vote, Fast is hopeful it will get the backing it needs.
“I am optimistic that at least one of the other parties will understand how critical it is to pass a substantial budget,” he said.
AFFORDABILITY AND OPPORTUNITY INCREASE IN FRASER VALLEY REAL ESTATE
(Surrey, BC) - Property sales in the Fraser Valley decreased by 62 per cent in November compared to the same month last year, moving from 1,327 sales on the Multiple Listing Service® (MLS®) in November 2007 to 507 sales for the same period in 2008.
“We’re seeing the combined effects of a lack of consumer confidence with the overall global economy added to a typical, seasonal slowdown in real estate,” says Kelvin Neufeld, President of the Fraser Valley Real Estate Board. “This new buyers’ market is creating excellent opportunities; in particular, for those buying a larger home, in prime locations or looking for an affordable purchase.”
Neufeld explains how upgrading from an average townhome in the Fraser Valley to an average single family detached home is more affordable than it was six months ago. “Compared to May 2008, average detached home prices have decreased by 6.8 per cent and townhomes by 6.2. Since detached homes have greater value, a person upgrading now is spending thousands of dollars less than they would have six months ago.
“This is an excellent market in which to find quality properties because fewer people are buying.”
The average price of a single family detached home in the Fraser Valley in November was $511,698, increasing by 0.1 per cent from $511,176 the same month last year but a decrease of 6.8 per cent since the peak of the market in May. Townhomes went for an average $319,883 last month, a decrease of 1.7 per cent compared to November of last year when they averaged $325,409 and a decrease of 6.2 per cent since May. The average price of an apartment in November was $213,801, a decrease of 0.6 per cent compared to $215,118 last year and a decrease of 6.9 per cent compared to May 2008.
While average prices remained stable or decreased modestly over one year, the benchmark prices, or the price of a “typical” home in the Fraser Valley in all three residential categories decreased by larger margins. The benchmark price for single family detached decreased by 6.6 per cent in one year, townhomes decreased by 5 per cent and apartments by 6.1 per cent.
Neufeld explains, “The housing price index is the most consistent barometre of prices because it measures a constant product, whereas average and median prices are affected when more expensive or more economical homes sell.
“REALTORS® watch benchmark prices closely. November’s numbers are telling us that typical homes in the Fraser Valley are becoming more affordable. That’s great news for families wanting to buy rather than rent, in order to have a smart, long-term investment.”
The Board received 1,866 new listings in November, a 13 per cent decrease from the 2,154 new listings received during the same month last year, taking the number of active listings to 11,800, 47 per cent higher than November of last year, but only 1 per cent higher than October 2008.
