British Columbia’s commercial real estate sector will find some challenging conditions this year according to the province’s real estate association.
BCREA’s Commercial Leading Indicator (CLI) points to flattening activity for 2019 with a decline of 1.8 points to 134.5, about 1% below that of a year ago.
“Following several years of robust growth, the BC economy slowed in 2018 and the CLI is reflecting that slowdown,” says BCREA Deputy Chief Economist Brendon Ogmundson. “That means the economic environment for commercial real estate activity will be less favourable in 2019.”
Weak fourth quarter retail sales and forestry manufacturing shipments were joined by a jump in short-term credit risk spreads, and weaker manufacturing employment, to create an overall slowdown in economic activity.
As a result, each component of the CLI posted a decline in the fourth quarter. Recent volatility in the CLI has left the underlying trend in the CLI flat over the past two quarters, signaling a slower growth environment for commercial real estate activity.
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