British Columbia faces the challenge of lower levels of economic growth, according to the latest economic profile and forecast from the Calgary-based Canada West Foundation.

Worsening economic conditions, with the United States at their centre, mean that economic growth for B.C. will fall well below the province’s six-year average of 3.4%, the foundation says.

However, the province will still exceed the rate of growth for Canada as a whole.

“Like the rest of Canada and most of the world, B.C. is confronted with a great deal of uncertainty when it comes to short-term economic prospects,” says senior economist Brett Gartner, author of the report, “and any forecast at this stage must be read with even more caution than would normally be the case. It is, however, possible to say this with a high level of certainty: economic growth in B.C. has slowed and will slow even more next year.”

Other key findings of the report include:

> the decline in the province’s export sector over the past two years has continued into 2008, due in large part to the tough conditions plaguing forestry industries;

> retail sales growth has slowed considerably compared to recent years, constraining economic growth in the near term;

> the total value of building permits in the first six months of 2008 is down from the same period in 2007 and growth in private and public sector investment has slowed again in 2008.

Although current economic conditions make it difficult to accurately gauge the future performance of the B.C. economy, the Canada West Foundation says its expects real economic growth in B.C. of 1.5% in 2008 and 1.3% in 2009.