Ottawa, May 29, 2018—All provinces can expect slower economic growth this year as a number of factors—ranging from uncertainty over NAFTA, stalled oil pipeline projects, cooling housing markets and weak business investment—weigh on the provincial economies, according to The Conference Board of Canada’s Provincial Outlook: Spring 2018.
“Weaker economic growth is forecast across the country, with only British Columbia, Prince Edward Island, Ontario and Quebec expected to see growth above 2 per cent this year,” said Marie-Christine Bernard, Director, Provincial Forecast, The Conference Board of Canada.
- British Columbia and Prince Edward Island will have the fastest growing provincial economies in 2018, with real GDP growth of 2.6 per cent.
- Ontario and Quebec’s economies will advance at a more moderate pace of 2.2 per cent.
- Following growth of 4.9 per cent in 2017, Alberta’s economy is forecast to expand by 1.9 per cent this year. But, with the recent rally in oil prices, there are upside risks to the forecast.
British Columbia and Prince Edward Island will be the growth leaders, with both provincial economies forecast to expand by 2.6 per cent this year. With B.C.’s strong economic performance in the last few years tied to the housing market, economic growth will moderate in line with a cooling housing market facing new policies. Still, the province will continue to benefit from strength in the services sector and solid growth in exports as duties placed on softwood lumber have not been as damaging to the industry as anticipated. Growth in Prince Edward Island’s economy will be supported by strong population gains due to immigration, record breaking tourism numbers and elevated demand for P.E.I. products.
Quebec and Ontario’s economies will advance at a more moderate pace this year as both provinces are facing weaker growth for household consumption. Both provinces can expect real GDP to expand by 2.2 per cent this year.
Manitoba’s economy will benefit from strong population increases and numerous construction projects across various sectors. Nonetheless, real GDP growth is expected to ease from 2.9 per cent last year to 2.1 per cent in 2018 due to weak consumer spending at the start of the year.
Alberta’s economy is performing well but a lack of investment in the energy sector is dimming economic prospects. Pipeline capacity issues are cooling oil producers’ appetite for new investment and drilling was also slightly down in the last winter season. While Alberta bounced back from recession in 2017 growing by 4.9 per cent, economic growth is expected to be weaker this year, at 1.9 per cent. There are upside risks to the forecast as the price of West Texas Intermediate is averaging around US$70 per barrel and could continue to increase.
Saskatchewan’s economy is forecast to advance by just 1.3 per cent due to declines in uranium production and weaker public-sector infrastructure spending. On a brighter note, job creation in the province has been improving and the unemployment rate is edging lower.
Aside from P.E.I., the Atlantic provinces will see modest economic growth in 2018. Nova Scotia has been benefiting from robust international immigration but an aging population and declines in natural gas production have been weighing on the province’s economy. Nova Scotia’s real GDP is forecast to rise by just 0.8 per cent in 2018. Despite robust construction activity, New Brunswick’s economic growth will be limited to 1.3 per this year and next as it struggles to grow its labour force with an aging population. Fuelled by accelerating oil production at Hebron, Newfoundland and Labrador’s real GDP is forecast to advance by 1.6 per cent this year.