B.C.’s Positive Economic Outlook Tempered by High Housing Costs

VANCOUVER, October 19, 2016 — For the third year in a row, B.C.’s CPAs have ranked the ability to attract and retain skilled labour as the number one challenge for business success in the province. Nearly 84 per cent of respondents rating this as a “major” or “moderate” challenge in the latest Business Outlook Survey administered by the Chartered Professional Accountants of British Columbia (CPABC). Much of the challenge in recruiting talent comes from the high cost of living, which was largely due to the increasingly expensive housing costs in Greater Vancouver.

According to the MLS Home Price Index, the average home price in August 2016 for the Greater Vancouver was $933,100, up 31.4 per cent from August 2015. The high housing prices make it unaffordable for those who make the average income in B.C., which was $53,373 in 2015. On average, households who earn the median pre-tax income in Greater Vancouver spent 76.9 per cent of their income on housing in 2015, according to the RBC housing affordability index.

Thus, it is not surprising that nearly 91 per cent of B.C. CPAs who responded in the Business Outlook Survey, a members’ survey conducted by the Chartered Professional Accountants of British Columbia (CPABC), identified housing prices as the top economic challenges to business success in B.C. CPAs in the Lower Mainland (91 per cent) and those on Vancouver Island (94 per cent) were most likely to indicate ‘housing prices’ as a challenge compared to respondents in other parts of B.C. (84 per cent).

Key findings from CPABC Business Outlook Survey

• When comparing B.C. to the rest of Canada, 36 per cent of respondents predict B.C.’s economy to grow faster than the Canadian average in the next two years. This percentage is up from 2015 (30 per cent) and 2014 (29 per cent) indicating an increasingly positive outlook for the province’s economy.
• Consistent with results from the past two years, survey respondents continue to be optimistic about B.C.’s economy with 62 per cent rating it as “good” or “excellent.” This positive outlook continues with one-quarter of respondents expecting B.C.’s economic performance to improve over the next two years.

About the CPABC Business Outlook Survey

CPABC commissioned NRG Research Group to conduct a web-based survey of CPA members regarding their impressions of the current and future of the economy in areas that they work, current challenges for business success, and the business climate in British Columbia. A total of 3,622 online surveys were completed between August 22 and September 6, 2016, which represents an overall response rate of 17 per cent.