US real GDP growth registered 4.1 per cent in the second quarter of 2018, boosted by 4 per cent growth in consumer spending and over 7 per cent growth in non-residential business investment. However, strong growth is not expected to last beyond 2018. Net exports were driven temporarily higher by a surge in soybean shipments ahead of expected retaliatory tariffs while consumption and investment were jolted higher by tax cuts. Meanwhile, government spending added significantly to overall growth due to massive new funding under the 2018 Bipartisan Budget Act. Once those temporary measures fade, growth will decelerate.
Under normal circumstances, strong economic growth in the United States is good news for the BC economy, which ship half of its goods exports to the US. However, under the current administration, the benefits are lessened by tariffs and the continued threat of further anti-free trade actions.
Copyright British Columbia Real Estate Association. Reprinted with permission.