BCREA Commercial Leading Indicator Shows Mixed Signals in Q2 2025

The BCREA Commercial Leading Indicator (CLI) posted a slight decline in the second quarter of 2025, falling 0.3 points to 152.4. Despite this quarterly dip, the six-month moving average rose to 152.5, highlighting stability in the broader trend. Compared to the same quarter in 2024, the index was up 2.9 per cent, suggesting the commercial real estate environment continues to hold steady overall.

Q2 Highlights: Diverging Trends in Economic Drivers

Economic Activity Index

The economic activity index fell by 0.9 points in Q2, reflecting underlying weakness in some key sectors. The decline was largely attributed to:

• Wholesale trade: down 5.1 per cent (inflation-adjusted)

• Manufacturing sales: down 4.5 per cent
  These contractions offset growth in retail sales, which posted a 2.0 per cent increase, showing consumer demand remained supportive.

Employment Component

Employment conditions remained relatively strong. The overall employment component increased by 0.5 points:

• Office employment: up 2.3 per cent

• Manufacturing employment: down 0.5 per cent
  This balance suggests steady job creation across the province, with office-based industries continuing to expand while goods-producing jobs faced pressure.

Financial Component

The financial component of the CLI rose by 0.3 points, supported by:

• REIT prices, which climbed 6.4 per cent, boosting confidence in the commercial real estate sector.

• Stable interest rate spreads, which remained virtually unchanged from Q1, signaling that short-term risks in financial markets were relatively contained.

Outlook

While the Q2 CLI points to some economic challenges—particularly in trade and manufacturing—the resilience in employment and financial conditions suggests that BC’s commercial real estate market remains on stable footing. Retail demand and investor confidence in REITs continue to provide positive momentum, though risks from slower goods-producing industries linger heading into the second half of 2025.