According to RBC economists, 2011 is shaping up to be a so-so year for British Columbia’s economy.  While there are some bright spots – including a surge in exports to China – that continue to drive growth in the province, their effect is dimmed by weakness in sectors such as mineral production and retail trade.  Though the economists remain confident that the BC economy will pick up in the remainder of this year and into 2012, they now project the rate of growth to be somewhat slower than previously forecasted:  2.1% in 2011 (from 2.6%) and 2.3% in 2012 (from 3.0%).

After concerns earlier this year when the jobless rate spiked to an eight-year high of  8.8% in February, BC’s labour market has since been on the mend, bringing the unemployment rate back down to 7.5% in August.

Overall, momentum in BC’s economy has been slower than expected by RBC economists, prompting them to revise their real GDP forecast lower for both this year and next.  While they continue to project a pickup in growth in 2012 relative to 2011, the rejection of the HST has added downside risk.  The reinstatement of the old PST, and the shift of the tax burden toward businesses, could weigh on the pace of business investment and job creation in the province.