RENNIE OUTLOOK 2025
EARNINGS Real wages have been increasing in British Columbia, with earnings growth outpacing inflation since early 2023, thus allowing workers to recapture some of their lost purchasing power from the previous high-inflation years. With a rising unemployment rate (5.9% provincially), and a falling job vacancy rate (3.6%), recent annual wage growth of 4-5% is likely not sustainable going forward.
OUR 2025 OUTLOOK
The labour market has been deteriorating for the past two years, and is unlikely to reverse course in the near-term; in turn, more modest wage growth is likely going forward. Our expectation is that annual wage growth will be in the 2.5-3.5% range for 2025.
INTEREST RATES With inflation back inside target range, the Bank of Canada began to unwind its restrictive monetary policy in 2024. Beginning the year with a policy rate of 5.00%, the Bank cut five times—including two 50-basis-point reductions in Q4—to finish the year at 3.25%. The Bank will look to maintain a neutral policy stance going forward (where its trend-setting rate is neither restrictive nor expansionary), and has stated it will evaluate each rate decision on a meeting-by-meeting basis.
OUR 2025 OUTLOOK
With inflation tamed and the current policy rate at the upper end of the Bank of Canada’s target range, we expect the Bank to cut its policy interest rate three more times in 2025, reaching 2.50% by the middle of the year.
Copyright © 2025 rennie group of companies. All rights reserved. This material may not be reproduced or distributed, in whole or in part, without the prior written permission of the rennie group of companies. Current as of January 29, 2025. Data from the Greater Vancouver and Fraser Valley Boards, Statistics Canada, Zonda Urban, CMHC, & rennie. While the information and data contained herein has been obtained from sources deemed reliable, accuracy cannot be guaranteed. rennie group of companies does not assume responsibility or liability for any inaccuracies. The recipient of the information should take steps as the recipient may deem necessary to verify the information prior to placing any reliance upon the information. The information contained within this report should not be used as an opinion of value, such opinions should and can be obtained from a rennie and associates advisor. All information is subject to change and any property may be withdrawn from the market at any time without notice or obligation to the recipient from rennie group of companies. E.&O.E. 11
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