- Our Town
Shuswap economy improving
Like Shuswap weather, the economic outlook is looking more spring-like as time goes on.
To a sold-out forum of 120 people, Bryan Yu, economist with the Central 1 Credit Union, told his audience the B.C. economy is on an upswing and, similarly, the Salmon Arm economy looks positive.
Yu was speaking at the Salmon Arm Economic Development Society’s Fourth Annual Business Forum, held Feb. 19 at the Prestige Harbourfront Resort.
Michael Wagner, CEO of Salmon Arm Savings and Credit Union, said his financial institution uses Yu’s services to help make SASCU’s investment decisions. The Central 1 Credit Union is the umbrella organization for the credit union system in B.C. and Ontario.
Things to look forward to?
Yu summarized his presentation with five points: • the B.C. economy will grow this year based on economic momentum in the U.S.; • major projects and investments will fuel strong expansion in 2015 onwards; • the Salmon Arm economy has stabilized; • tourism, forestry and demographics will support economic growth in the region; and • housing will remain “subdued” because of excess inventory but demand will start to pick up.
Yu said the global economy is improving. Europe is now out of recession, after six quarters of seeing the economy contract. However, the unemployment rate there is still in the double digits, with youth unemployment high.
Canada didn’t see the major drop in the economy in 2013 that the U.S. and UK did.
“It wasn’t the greatest year for the economy, but it was still positive in terms of growth,” Yu said.
Things were a little worse in B.C. than Canada as a whole, with sectors weakened by global malaise, he said. Those affected included mining and oil-and-gas investment as well as government services hit by budgetary cutbacks, which translated into a slowdown in “housing, consumption and domestic growth.”
B.C. has seen some migration flowing in from Ontario and the Atlantic provinces, but that hasn’t kept pace with the loss to Alberta and Saskatchewan, where wages are higher.
It’s expected, however, that “Alberta swagger” will boost activity in this region, Yu said. The feeling of economic well-being may translate into discretionary purchases – such as real estate – in the area.
“Overall, tourism in B.C. has been trending higher,” he said.
Signs of improvements in the U.S. are positive for B.C. The U.S. economy grew more than three per cent in the last two quarters of 2013, consumer finances are in better shape, the housing market is recovering, the country is becoming more self-sufficient in energy and interest rates remain low, he said.
However, “while numbers are positive, they’re still relatively weak.”
He said Canada is still dependent on U.S. exports and, as the economy improves, they should experience growth.
The Canadian dollar should be 87 cents by the middle to the end of the decade, Yu predicted, which will be good for Canadian businesses.
The inflation rate in Canada is low, he said, so it will be July of 2015 before interest rates increase.
“Short term rates are to remain fairly low but long term will start picking up.”
Yu said the number of businesses in Salmon Arm has held steady since the recession, while the population peaked in 2009 at about 17,500 and has seen a “very modest” drop since then.
While the number of people 50 to 55 and 60 to 69 years has seen the biggest growth, the largest decrease has come in the 40 to 49 age group as well as those 10 to 14 years old. The group 25 to 34 has seen increases.
He said the regional population is expected to expand over the next five years but annual growth will be less than one per cent.
The seniors’ share of the population is high in Salmon Arm at 24.2 per cent, but not as high as Qualicum Beach at 47.2. Overall in B.C. it’s 15.6 per cent, while it’s 14.8 Canada-wide.
Pensions make up a large component of regional income, one of the factors that support economic growth, along with tourism and forestry.
“I think the local economy will be quite positive going forward, driven by things like the lumber market. The region’s quite lucky in a sense, the mountain pine beetle didn’t have as much of an impact compared to other areas. The prices of lumber have shot up quite a lot in the past year.”