Prince George Economic Outlook July 2009
Provided by Initiatives Prince George
The Bank of Canada released its quarterly
Monetary Policy Report1 this month,
providing an updated outlook for the
Canadian economy. In a projection that is
in line with recent forecasts from a variety
of other sources, the Bank expects that
economic growth will resume later this
year, globally and in Canada.
In the report, the Bank made reference to
signs that economic activity has begun to
expand in many countries, citing the
vigorous policy actions taken by monetary
and fiscal authorities around the world as
key factors contributing to the budding
recovery. However, while early policy
decisions reduced the likelihood of an
extreme negative outcome for the global
economy, the Bank emphasized that the
recovery is still in the emerging stages,
and that effective and resolute policy
implementation remains critical to
sustained economic recovery and future
global growth.
According to the Bank’s analysis, the
Canadian economy continued to contract
in the second quarter of 2009, although
the pace of decline moderated,
suggesting that a trough has been
reached; growth is expected to turn
positive in the third quarter. It is
projected that the 2.3% contraction in the
Canadian economy this year will be
followed by growth of 3.0% in 2010 and
1 http://www.bankofcanada.ca/en/mpr/pdf/2009/mpr230709.pdf
3.5% in 2011; comparatively, the global
economy is projected to decline by 1.7%
this year, then grow 2.3% in 2010 and
3.9% in 2011.
Factors underpinning the projected
Canadian recovery include monetary and
fiscal stimulus, improvements in global
financial conditions, the beginning of the
recovery in the global economy, and a
strengthening in the terms of trade. While
the higher Canadian dollar and the
restructuring of key industrial sectors are
moderating the pace of overall growth,
the Canadian economy is supported by
better financial conditions, firmer
commodity prices and higher levels of
business and consumer confidence than
anticipated, which has resulted in the
projection for a more immediate return to
positive growth.
Early signs of recovery identified in the
Bank’s report include the fact that the
housing sector appears to be reviving and
that financial conditions in Canada have
improved in line with recent global
developments, and continue to be more
favourable than in other advanced
economies.
Export volumes are expected to recover
over the projection period in response to
an improvement in external demand,
partly reflecting a rebound in US housing
activity as well as higher commodity
prices. These factors will be positive for
BC and it may be these factors, along
with the Olympics, that have influenced
the recent forecast from the Conference
Board of Canada that BC will record 3.3%
real GDP growth in 2010, the highest rate
in Canada.2 The Conference Board also
predicts BC’s retail sales, GDP per capita,
disposable income per capita and
employment rate to be above the national
average in 2010. A strong recovery in BC
will be important to strengthening
business and employment conditions in
Prince George more rapidly as the global
economic recovery continues.
Employment
Employment numbers in Prince George
improved for the third consecutive month
in June, with the number of employed
persons increasing by 1,100 (2.6%) from
the previous month. Provincially,
employment decreased by 0.2% monthover-
month, while the number of
employed persons in Canada remained
relatively unchanged. The Prince George
labour force continues to grow, increasing
by 1,200 persons in June; as the number
of unemployed persons remained
unchanged, the unemployment rate
decreased by 0.3% (to 11.3%). In
contrast, the number of unemployed
persons in BC and Canada increased by
7.8% and 2.8%, respectively, continuing
the trend from last month; unemployment
rates rose 0.5% provincially (to 8.1%)
and 0.2% nationally (to 8.6%). The city’s
employment rate increased 1.6% (to
65.3%), while rates declined by 0.2% in
BC and Canada.
Real Estate
565 properties worth $121 million
changed hands through MLS in the City of
Prince George in the first six months of
the year, compared to 693 properties
worth $153 million in the same period in
2008. At the end of June there were 814
properties of all types available on MLS
within the City limits, compared to 844 at
the end of June 2008. Residential sales
activity continued to be strong in June;
100 single family homes were sold in
Prince George, with an average price of
$223,085; unit sales are trending upward
but average home prices are fluctuating
each month, reflecting the variety of
types of properties being sold. At the end
of June, the year-to-date average price
for a single family home was $231,478,
just 4.6% lower than the same period in
2008; year-to-date unit sales are down
14.4%. Comparatively, year-to-date
average prices are down 5.3% and 2.5%,
respectively, in BC and Canada, and unit
sales are down 15.3% and 10.5% over
the same period last year.
Housing construction
There were 23 housing starts in Prince
George in June, down from 36 starts in
June 2008. Housing starts were also
down quite significantly compared to last
year in BC and Canada, declining 59.7%
and 36.3%, respectively, last month.
There were 40 residential housing units
completed in the city in June, up from 27
in the same month last year, and there
were 263 housing units under
construction (202 single family dwellings
and 61 multiple dwelling units); 10.8%
fewer than in June 2008.
Building Permits
The City of Prince George issued 71
building permits valued at $9.6 million in
June, up 61.3% compared to the same
month last year and bringing the year-todate
total to $28 million – down 36.6%
compared to the same period in 2008.
Residential permits, up 161% year-overyear,
were the main contributor to strong
values in June, accounting for 54.9% of
the total permits issued. Institutional
permits were also up significantly (118%)
compared to the same month last year.
Residential and Institutional permits are
still the main contributors to the overall
decline in year-to-date permits, down
43.0% and 82.2%, respectively.
Commercial permits, however, are up
11.6% compared to the first six months
of last year. Comparatively, despite
month-over-month increases in May,
permit values were down 57.9%
provincially and 24.8% nationally, yearover-
year. Year-to-date, permits were
down 51.2% and 27.9%, respectively.
Business Licenses
The City of Prince George issued 42 new
business licenses in June, 5 fewer than in
the same month last year. Existing license
renewals increased last month (31
compared to 3 in June 2008), and yearto-
date renewals were up 7.2% over the
same period last year. The total number
of business licenses issued year-to-date is
up 8.6% compared to the first six months
of 2008.
Airport Passenger Volumes
30,999 passengers passed through the
Prince George airport in June (15,397
inbound and 15,602 outbound), 10.7%
fewer than in June 2008. Year-to-date,
traffic through the airport has slowed by
14.6%, in line with declines elsewhere.
Comparatively, traffic through the
Vancouver airport was down 11.1%,
year-to-date, as of the end of May.
