Business PACE NEAR NATIONAL AVERAGE iN ‘87 ank forecasts B.C. economic growth THE BANK of Montreal recently presented its 1987 forecast to the West Vancouver Chamber of Commerce at its monthly breakfast meeting at the Ambleside Inn in West Vancouver. The British Columbia economy will not grow as strongly in 1987 as it did in 1986, largely because of the absence of Expo 86, but it will still grow at a pace near the na- tional average, Bank of Montreal forecasts. Presenting the bank’s annual economic outlook, David T. Robinson, senior commercial banking manager of the bank’s North Shore and Coast Commer- cial Banking Unit, said: ‘‘The hugely successful Expo 86 has dominated developments in the B.C. economy for most of 1986, A good increase in forestry sector ac- tivity also served to propel B.C. in 1986, we estimate, to its strongest output gain in six years. In fact, the B.C. growth rate last year is expected to exceed that of any other province, a far cry from the pace of activity in the four previous years, when B.C.’s growth rate lagged the national average by a substantial margin. “Flowever, the renewed vigor is not expected to persist into 1987, although we still see the province moving ahead at a pace near the national average.”’ The bank is predicting that the Canadian economy will grow in 1987 by 2% per cent measured fourth quarter to fourth quarter. Something just below this rate in B.C. would compare to the bank’s estimate that the B.C. economy will show growth for 1986 in the four per cent range, well above the anticipated national average of about three per cent. Other predictions for the B.C. economy in 1987: * Retail sales in the three to five per cent range, down from last year’s increase of 6% to 7% per cent. * Tourism will benefit from the boost no doubt given it by Expo, from the low Canadian dollar and against Far Eastern currencies, particularly the Japanese Yen. But while tourism’s outlook is good, it is hard to imagine its increase in 1987 will offset Expo. *® Farming and fishing prospects look reasonably promising, given the expectation of firm prices through 1987 as demand increases somewhat while supply stabilizes or drops off. : * Modest growth in the forestry sector, both pulp and paper and lumber. © Softwood lumber profit margins will be shaved and some business could be lost to American competitors as a result of the 15 Pisano per cent export tax. But B.C. ex- ports may suffer more from a somewhat lower level of U.S. housing starts. © Pulp and paper shipments should continue to do quite well, helped both by stronger growth in the U.S. and Canada and the lower exchange rate of the Canadian dollar against the U.S. and Scan- dinavian currencies. *In the mining sector, con- tinued slow growth in the in- dustrial countries, together with world oversupply, seems to point to another poor year, as 1986 was. © The oil and gas sector will re- main relatively depressed, with perceived long-term prospects not buoyant enough to induce much upturn in drilling. e With business investment in plant and equipment apparently declining in 1986 for the fifth straight year, capital spending in 1987 may show a modest tur- naround beginning .in some in- “dustries where obsolescence and capacity constraints are apparent. © Housing starts, after a 1986 increase of 20 to 25 per cent at 22,000, are expected to slacken to 19,000 to 20,000 in 1987. Other forecasts by the bank in- clude. © The inflation rate in Canada will rise from four per cent in 1986 to five per cent, about the same as EXTEND YOUR - VANCOUVERVICTORIA BUSINESS DAY. ® State of-the-art twin engine Bell 412 jet helicopter, providing climate controlled comfort. © 8 flights daily, Monday to Friday. © Vancouver flights begin at 7:00 a.m. Last flight departing Victoria at 7:30 p.m. Downtown-to-downtown flight time just 32 minutes. For reservations, call your travel agent or Helijet Airways. IN VANCOUVER CALL | __273-1414 _| t* ae Be BEaS if a 21 - Wednesday, March 4, 1987 - North Shore News ® The Canadian dollar is ex- pected to trade in a range of 71 to 72% cents U.S., moving toward the lower end of that range in the second half of the year. in the U.S. ® World demand for oil is ex- pected to increase with prices rising to the $16 to $18 per barrel range. eU.S. growth will accelerate from 2% per cent in 1986 to about 3 per cent largely because of a big improvement in the U.S. trade im- balance. b . Growth in Japan will pick up BRITISH COLUMBIA ut only marginally to 4 per cent fl UTE OF from 3% per cent in 1986. TECHNOLOGY * There will be a modest accel- ad eration in Europe to about 3 per = = cent from 2% per cent this year. —= = e The combination of higher in- OPENEDUCATION ACCESS CENTER flation, stronger growth and the persistently large U.S. government deficit are expected to push up U.S. long-term rates about 1% points. 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