By: Business Vancouver
A resurgence in American housing starts will help position Prince George at the head of the country’s class of mid-sized cities in terms of future growth, according to the Conference Board of Canada. However, the city’s mayor says the region is striving to diversify from its reliance on forestry.
The Conference Board of Canada’s Mid-Sized Cities Outlook 2016 studied 32 mid-sized Canadian cities, using Statistics Canada data.
The Conference Board of Canada predicted Prince George will lead the country’s mid-size cities in growth. It has forecasted Prince George’s real GDP will grow 2.4% this year and 2.8% in 2017. “Renewed gains in construction output, steady growth in the forestry industry, and ongoing strength in the finance, insurance, and real estate industry will help real GDP growth in Prince George,” states the report.
Prince George Mayor Lyn Hall said it’s exciting to see the city enjoying the spoils of a robust economy south of the border.
“There’s various pockets within the U.S. that are seeing a very strong increase in the housing market,” he said. “And certainly forestry is our business in the north and it certainly does help our exports.”
According to US Census data, housing starts rose 7.2% in February 2016 to 822,000 — the highest level since the precipice of the 2007 sub-prime crisis. Hall added things are different than 2007, when American residential construction collapsed.
“When you talk about the U.S. housing market, there’s no question that markets throughout the world, whether it be forestry or other commodities, you rise and fall with those markets. And I think it’s important for us and we are striving to make sure that we have a diversified economy,” said Hall.
Forestry Innovation Investment estimates the sector makes up 35% ($12.4 billion) of B.C.’s total exports. Forestry related activities directly also support more than 7,000 businesses and employ approximately 60,000 people.
Canadian construction activity is also helping fuel Prince George’s building boom. Multiple-unit housing starts are set to hit a 20-year high in 2016 countrywide, according to the Conference Board of Canada. Overall, construction output is expected to grow by 4.4% in 2016 in Canada. Construction in the Prince George-area is also bustling: the 173-unit RiverBend Seniors Community complex broke ground this April and Inland Kenworth is building an 88,000-square-foot facility.
Following an 8.2% decline in 2015 , employment is expected to rebound this year and next in Prince George, increasing 4.5% and 2% respectively.
Prince George’s GDP prediction would outpace the national average. According to the Bank of Canada, the country’s overall GDP is projected to accelerate from 1.3% this year to 2.2% in 2017.