News Releases

Strong consumer and construction activity in British Columbia will continue to help offset a decline in the forestry industry, according to a provincial economics report released today by BMO Financial Group.

“The headwinds facing the forestry sector will persist into 2008, dragging growth down from an expected 2.7 per cent to 2.5 per cent,” said Douglas Porter, Deputy Chief Economist, BMO Capital Markets. “But this will still leave B.C. among the strongest provinces in the country.”

Highlights of the report include:

• Forestry is getting battered by the surging loonie and U.S. housing recession. Adding to the misery are trillions of mountain pine beetles eating their way through B.C. forests, and are now expected to kill 80 per cent of the province's pine.
• However, strong construction activity ahead of the 2010 Olympics will continue to offset this weakness, and residential construction has shown no sign of slowing with housing starts up 5.8 per cent in 2007.
• The province's labour market remains tight with the unemployment rate near a record low, which should help keep B.C. consumers in a spending mood through 2008.
• B.C. is now projecting a $2.1 billion surplus for fiscal 2007/2008—the fourth consecutive—up from original budget estimates of $400 million.

The complete report can be found at www.bmocm.com/economics.

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