Ottawa, August 22, 2018—Economic growth is forecast to slow in the Atlantic Canada cities of St. John’s, Moncton and Saint John this year, according to a new report by The Conference Board of Canada. In fact, Saint John is expected to post the slowest economic growth among the 16 metropolitan areas in the summer edition of the Metropolitan Outlook.
“Weaker economic growth is forecast across the country this year and the cities of St. John’s, Moncton and Saint John are no exception,” said Alan Arcand, Associate Director, Centre for Municipal Studies, The Conference Board of Canada. “Like most cities in our report, these three Atlantic cities can expect economic growth between one and two per cent in 2018.”
- Real GDP growth in St. John’s is expected to reach 1.9 per cent this year, thanks largely to the indirect benefits of increased oil production at the Hebron oil field.
- Moncton’s economy is forecast to grow by 1.8 per cent in 2018, down from a 2.8 per cent increase in 2017.
- The Saint John economy is projected to grow by a modest 1.0 per cent in 2018, less than half of last year’s pace.
- Among the 16 medium-sized Canadian cities covered in the report, Oshawa will have the fastest growing economy this year.
The St. John’s economy is expected to grow by 1.9 per cent this year, down slightly from the 2.1 per cent increase posted last year. Once again, the economy will be led by the mining sector, thanks to the indirect benefits of rising oil production at the new Hebron offshore oil field, as many corporate offices and supply and services firms for the province’s offshore oil industry are located in St. John’s. However, other sectors will struggle. Construction output is forecast to contract for the third time in four years in 2018, the result of a stalled housing market and the wind down of some non-residential projects. In addition, several services sectors are forecast to post modest declines this year, held back in part by provincial government fiscal austerity measures, a reaction to significant declines in offshore royalty revenues. The local job market also remains weak. Employment is on track to fall for the second straight year this year, pushing the unemployment rate up to a 12-year high of 8.6 per cent.
Following an expansion of 2.8 per cent in 2017, Moncton’s economic growth is expected to slow to 1.8 per cent this year, with most industries experiencing a slowdown. Although the local construction sector will continue to benefit from several projects, including the Junction Urban Village development, housing starts are poised to fall by about 30 per cent. On the services side, the wholesale and retail trade sectors are positioned to slow sharply this year as consumers become more cautious in the face of rising debt loads and rising interest rates. On a positive note, employment is on track to increase strongly this year, rebounding from back-to-back declines over 2016–17.
The Saint John economy is forecast to expand by a modest 1.0 per cent in 2018, less than half last year’s pace. The primary and utilities and manufacturing sectors will be key growth drivers for the Saint John economy, although their activity is being somewhat held back by U.S. softwood lumber tariffs. The outlook for these sectors is also subject to further downside risk stemming from the uncertainty surrounding the NAFTA renegotiations. Retail trade output growth is expected to slow sharply, though it will remain the fastest growing sector in Saint John, with a healthy 3.2 per cent increase anticipated. The city’s labour market is having a rough year—employment is on track to drop by 2.9 per cent in 2018, fully offsetting last year’s gain.
The Metropolitan Outlook: Summer 2018 is The Conference Board of Canada’s analysis of 16 medium-sized Canadian census metropolitan areas.