How Is The Economy Expected To Grow – 5 Market Conditions in BC
2020 is looking bright thanks to an upswing in non-residential construction. Expect the economy to grow; the coming year promises to be eventful for the BC business community. In this post, we examine five factors shaping the outlook and business climate in the province this year.
#1 Decreased Borrowing Costs — Canadians should see borrowing costs ease in 2020. While the Canadian economy depends on consumer and housing-related spending, both have been statistically low due to waning competitiveness, weak business investment, and flagging exports. These conditions have contributed to lower interest rates.
#2 Increased Housing Sales Activity — In BC, the housing sales rebound will continue into 2020, and residential building activity is surprisingly on the upside. Jock Finlayson and Ken Peacock of the Business Council of British Columbia state, “Under the weight of stress tests, demand-dampening tax measures and escalating affordability challenges, home sales fell precipitously in recent years. But in the second half of 2019, sales activity jumped, resulting in more balanced market conditions.”
#3 Positive Environment for Investment — Population growth has been primarily fueled by immigration, which has contributed toward the rising demand for housing. Lower interest rates and moderate job growth has also created a more favorable environment for residential investment. The BC government plans to develop more rental, co-op, and non-market housing, adding to new home construction.
#4 Expanding Tech Sector — A substantial expansion in the province’s tech sector will boost wages and further strengthen the industry. With the arrival of global tech giants like Amazon and Microsoft, there will be upward pressure on wages for skilled tech workers, and the demand for tech workers in other sectors such as finance, professional services, health care, and transportation will continue to climb.
#5 Return to Structural Federal Budget Deficits — The turning of a new decade will also mark a return to structural federal budget deficits. More massive deficits emerged in the Trudeau government’s first term. The pattern is set to continue and will likely accelerate with a weakened, left-leaning minority Liberal government. This trend will persist, particularly in areas linked to climate change, energy development, energy efficiency, environmental permitting, and labor standards.
We will always witness changes in the market economy due to characteristics like freedom of choice, the motive of self-interest, and competition. What drives you to invest? Share your ideas or comments with us anytime. We’d love to hear from you!
