Provincial Outlook Economic Forecast: Prince Edward Island—June 2020
The Conference Board of Canada, 14 pages,
June 17, 2020
This quarterly economic forecast for the province of Prince Edward Island examines the economic outlook for the province, including gross domestic product (GDP), output by industry and labour market conditions.
- In our winter outlook, P.E.I. was expected to lead the country in economic growth this year. While we still expect this to happen, the numbers have been completely altered, as every province in the country, including Prince Edward Island, is undergoing an intense recession as a result of the COVID-19 pandemic.
- The downturn will be intense. But we also expect it to be short-lived, as the recession will largely be contained to the first two quarters of this year. Still, the second quarter’s annualized drop of 20 per cent will be the steepest decline in the province’s history.
- A key driver of economic growth on the Island is tourism, which will be hit hard by the travel restrictions and self-isolation rules in effect around the globe and within Canada.
- Unsurprisingly, we expect the province’s labour market to struggle in 2020. The unemployment rate will soar to nearly 16 per cent in the second quarter before falling to 10.2 per cent by the end of the year.
- Spending by the provincial government will help counter the effects of the pandemic. The public administration and health care industries account for a large share of the economy in P.E.I. compared with other provinces, and both are expected to post strong growth as the government responds to the pandemic.