Recession could cut 42,000 B.C. jobs this year
Forget rain: Economists are forecasting doom and gloom for B.C.'s economy this year as a worldwide recession unfolds.
A report released today by the Credit Union Central predicts more than 42,000 jobs will be lost this year alone in British Columbia.
Declining construction and business investment predicted for 2009 to 2013, along with weak consumer spending and recessions in forestry and housing, will cause an "economic contraction" in 2009.
Chief economist Helmut Pastrick says the province can't avoid the downdraft of the global economic recession, and the unemployment rate could surge to 7.5 per cent.
"The economy will contract in 2009, as a result of falling commodity prices, weaker export markets, lower consumer and business confidence levels, tighter credit conditions and recessions in the forestry and housing sectors."
He also says B.C.'s gross domestic product -- the measure of all goods and services produced -- will decrease for the first time in a decade. Combined with the decline in economic output, this will see the size of the economy as measured in current dollars shrink for the first time ever.
The report says the 2010 Winter Olympics will provide a temporary boost to economic growth, but that will slip back in 2011 and then the economy will grow by about four per cent in 2013.
Consumer price inflation is forecast to drop to less than one per cent this year because of a sharp decline in energy costs and lower interest rates.
B.C. has had four recessions since 1961 with the longest downturn in 1981-82.
More bad news for Canada
On Thursday, the Conference Board of Canada said not even massive amounts of government spending and tax cuts will keep the country out of recession this year.
The Ottawa-based think-tank predicts the economy will suffer through three negative quarters of growth and will shrink by half a per cent in 2009, even with the fiscal stimulus package expected in the Jan. 27 federal budget.
The Board says the U.S.-led global recession is mostly responsible for the worsening economic prospects in Canada.
With files from The Canadian Press