KELOWNA, B.C. – B.C. economist Ken Peacock believes the provincial trucking industry has a bright future and will continue to grow in the coming years.
Speaking during the B.C. Trucking Association (BCTA) 2017 AGM and Management Conference June 3, Peacock, chief economist and vice-president of the Business Council of B.C., said the trucking sector would benefit from expected growth in exports to the US and Alberta, with the Wild Rose province digging itself out of the doldrums in 2017.
Peacock said he was surprised by how strong the trucking sector has been in B.C. over the past decade, growing 7.2% last year and 5.1% overall between 2011 and 2016.
Asked how he could be so optimistic given the uncertainty surround the North American Free Trade Agreement (NAFTA) and softwood lumber duties on exports heading south, Peacock said he believed the Trump administration’s focus when it came to the trade dispute was more on Mexico and its creation of what he called a low-wage environment. As for lumber, he expected that stronger prices would offset the additional duties being imposed on Canadian exports to the US.
Overall, the global economy is expected to grow in 2017, according to Peacock, who added, “But it by no means is very strong or robust.”
Much of the global escalation will be aided by a strong US economy, which has seen 82 consecutive months of growth and is anticipated to see 3.5% growth in 2017 and 3.6 in 2018. But, as Peacock pointed out, comes with some political uncertainty with regards to the Trump agenda and whether it will speed economic activity or bring it to a halt.
Peacock sent a direct message to the Trump administration that Canadian exports are a vital cog in the US economic wheel, and renegotiating NAFTA should be approached with caution.
He underscored that Canada is the largest supplier of oil to the US at 3.169 million barrels a day, as well as natural gas, with 7.193 million billion cubic feet (BCF) being sent south daily. There are also around 35 US states where Canada is the top export country.
“We need to keep those borders open, absolutely,” Peacock said.
B.C. is expected to continue its economic growth in 2017, but will see a slight slowdown from the robust numbers of the past three years.
In 2016, B.C. and Washington state led North American economic growth, both at 3.7%.
Housing has been the main driver of the B.C.’s economy, with Peacock saying approximately 40% of the province’s growth can be linked back to the housing sector.
“Housing is such a strong economic driver in B.C., it’s hard to overstate,” Peacock said, adding that another strong year would certainly be good news for the trucking sector.
Interprovincial exports are also important to B.C.’s economy, with the province shipping goods primarily to Alberta and Ontario.
B.C.’s main exports include lumber, metallic mineral products, machinery and equipment, coal, pulp and paper, other wood products, agriculture, and natural gas.
Peacock said the Alberta economy is 6% smaller today than it was two years ago, but with slightly higher oil and gas prices expected in the coming year and consumer activity on the rise, the province is poised to get back on its feet in 2017 and 2018.
One caution for B.C.’s economic future was its aging population, one Peacock said is the oldest in Western Canada, which will pose challenges to the province’s workforce.
He also noted that Canadians are currently carrying a heavy debt to personal income ratio, which sits at 168%, higher than what was seen in the US prior to the Great Recession.
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