Ottawa, February 28, 2018—British Columbia and Alberta will still be performing well this year and will be joined by Prince Edward Island, and Newfoundland and Labrador for the strongest economic growth this year, according to The Conference Board of Canada’s Provincial Outlook: Winter 2018.
“British Columbia’s economy still has a lot of momentum and will be the only province to see economic growth above 3 per cent this year,” said Marie-Christine Bernard, Director, Provincial Forecasting, The Conference Board of Canada. “Most provinces will perform well, though some will see their economic growth moderate this year.”
- B.C.’s economy is forecast to grow by 3.1 per cent this year, making it the provincial economic growth leader.
- Alberta, Prince Edward Island, and Newfoundland and Labrador will rank among the fastest growing provincial economies in 2018, with growth of 2.8 per cent forecast for Alberta and P.E.I., and 2.6 per cent for Newfoundland and Labrador.
- Ontario and Quebec will see their economic performance moderate from close to or above 3 per cent growth last year to around 2 per cent in 2018.
Fuelled by a number of large energy initiatives that are under development or will start construction this year, British Columbia’s economy is forecast to grow by 3.1 per cent in 2018. Beyond this year, however, the province is not expected to continue its streak of above 3 per cent growth. The erosion of affordable housing, coupled with tighter mortgage regulations will ease housing demand and contribute to a decline in housing starts in 2019. Meanwhile, the province’s labour market conditions are expected to parallel the slowdown in the housing sector.
Alberta’s recovery will continue to firm up, with growth of 2.8 per cent forecast for 2018. Drilling is expected to improve or maintain last year’s level of activity, while growth in investment will be modest as major oil sands projects currently under construction are completed. With employment growing by 1.7 per cent this year, the province’s unemployment rate will drop to close to 6 per cent by the end of this year.
Saskatchewan can expect another year of modest economic growth in 2018. While the province’s resources sector is benefiting from more favourable global demand conditions for potash and oil, job creation and the domestic economy have been lacklustre. Overall, the real GDP is forecast to rise 1.3 per cent this year.
The pace of economic growth is expected to ease in Manitoba over the next few years. Despite strong population gains and housing demand, the winding down of large scale investments and the closure of several mines will keep Manitoba’s real GDP growth to 1.8 per cent in 2018.
Ontario and Quebec will see their economic performance moderate from close to or above 3 per cent growth last year to around 2 per cent in 2018. Led by a slowdown in the housing market, lacklustre export growth and slowing consumer spending, Ontario’s economy is forecast to advance by 2.1 per cent in 2018. Amid a sharp increase in minimum wages, Ontario job creation will slow this year. The Conference Board estimates that minimum wage increases will mean that the provincial economy will create 40,000, or more, fewer jobs.
Quebec’s economy will continue to perform well, but growth is expected to slow to 2.3 per cent in 2018. With the province’s labour markets at or very close to full employment, this will leave little room for a repeat of last year’s hiring spree. Quebec’s unemployment rate is expected to average 5.2 per cent in 2018, the lowest it has been in the last 40 years.
The Atlantic provinces continue to deal with a rapidly aging population and weak labour markets. The region has had success in welcoming a record number of immigrants, but economic growth will remain quite weak in Nova Scotia and New Brunswick compared to the rest of Canada. Nova Scotia’s economy is expected to advance by a modest 1.5 per cent in 2018, as the end of major projects, including the Maritime Transmission Link and Halifax Convention Centre, dampen the outlook for the province’s construction sector. New Brunswick’s economy is expected to continue making gains, but the aging of the workforce will limit real GDP growth to 1.4 per cent this year.
Prince Edward Island’s economy is forecast to grow by 2.8 per cent in 2018, supported by strong population gains, promising tourism prospects and elevated demand for P.E.I. products.
Following a contraction last year, Newfoundland and Labrador’s economy is forecast to bounce back this year, growing by 2.6 per cent. With the completion of the Hebron project in 2017, oil production in the province will ramp up this year, adding significant volume to the mineral fuels mining sector. However, fundamentally the provincial economy is not very strong. Employment and the labour force have been declining for the past five years and the population stopped growing last year.