Prince George will see the strongest economic growth among the seven mid-sized cities covered in a Conference Board of Canada outlook.
Following growth of 2.6 per cent last year, the northern B.C.’s city economy is forecast to make further gains over the next two years, with real GDP rising by 2.4 per cent this year and 2.8 per cent in 2017.
“The Prince George economy has been growing at a healthy pace for several years, and 2016 should be no different,” said Conference Board associate director - municipal studies centre Alan Arcand. “We expect that much of the city’s growth this year will be fuelled by strong gains in forestry, construction, finance, insurance and real estate.”
On the heels of five years of growth, output in Prince George’s primary and utilities industry is projected to keep rising, albeit at a slightly cooler annual average rate of 2.6 per cent this year and next.
Growth is being driven by stronger U.S. new home construction activity, which has generated higher demand for B.C. wood products.
Overall, construction output in the city is expected to grow by 4.4 per cent this year.
Thanks to the healthy local housing market, Prince George’s finance, insurance and real estate industry is poised to expand by 5.6 per cent in 2016, making the sector this year’s growth leader. Although the remaining services-producing industries will post more moderate gains this year, overall growth in the services sector is still projected to come in at 2.5 per cent.
Following a steep 8.2 per cent decline in 2015, employment is expected to rebound this year and next, increasing by 4.5 per cent and 2 per cent, respectively. Retail sales are forecast to climb by 4.6 per cent in 2016.
“The results of the report are very encouraging and show that the local economy is expected to continue on an upward trend over the next two years,” said the city’s economic development manager, Melissa Barcellos.
“This report confirms what residents in Prince George have felt for a while now: Prince George is open for business and economic momentum is building,” said Mayor Lyn Hall.
The Mid-Sized Cities Outlook 2016 also looked at Timmins, Sault Ste. Marie, Brandon, Lethbridge, Red Deer and Medicine Hat.
Prince George issued 218 permits for $70.8 million worth of construction in the first half of this year, the highest half-year figure in four years.
The most-recent data does not include the $35 million Marriott Courtyard hotel that is now underway next to the Prince George public library.
Hall said the new Marriott is a “cornerstone” of city council’s effort to revitalize the downtown. The site had been planned for another hotel, but that proposal never came through.
Ryan McRae, Marriott International Inc.’s area vice-president of lodging development said the chain’s hotels are “50-year assets and become a very important part of the community.”
At $20 million, the largest project accounted for so far is a 173-unit RiverBend seniors housing facility. A permit was taken out in the first quarter and a groundbreaking started in July.
“It’s been a very long time since we’ve seen two cranes operating on two separate projects, that’s very nice to see,” said Mayor Hall.
About 90 per cent of the money for those two projects comes from the private sector, Hall also noted.
“When the private sector starts to invest in your community you know they’ve got faith in what we’re doing as a community and faith in what Prince George is all about, so that’s very good news,” Hall said.
Also weighing in among the major projects is the $13.4 million Inland Kenworth building on Highway 97 South. Work on that industrial site began in May.
New single-family home construction has so far registered $21.8 million on 78 permits, compared to $5.3 million on 18 permits at the same point last year.
“Everyone seems fairly swamped now,” said Canadian Home Builders Association - Northern BC president Jody Tindall.