After posting modest economic growth in 2011, most provinces can expect their outlooks to improve in 2012 and 2013, according to The Conference Board of Canada’s Provincial Outlook – Autumn 2011.
Ottawa, November 25, 2011 – After posting modest economic growth in 2011, most provinces can expect their outlooks to improve in 2012 and 2013, according to The Conference Board of Canada’s Provincial Outlook – Autumn 2011
“Private sector activity will pick up in 2012, helping to offset sharp declines in federal and provincial infrastructure spending,” said Marie-Christine Bernard, Associate Director, Provincial Forecast. “But despite little direct exposure to European markets, provincial economies would be affected if the EU sovereign debt crisis spread globally. As a result, risks to the forecast remain elevated.”
Central and Atlantic Canada will be hampered by sluggish growth in the United States, weak consumer spending, and fiscal austerity measures. The Western provinces will once again be the growth leaders in Canada, thanks to high commodity prices and robust investment in the energy sector.
Saskatchewan’s economy is being fuelled by the continued development of the potash industry, and steady expansion in oil and gas extraction. Real gross domestic product (GDP) is expected to rise by a brisk 5.1 per cent in 2011, and Saskatchewan will have the fastest growing provincial economy. Growth is forecast to ease to a still-impressive 2.8 per cent in 2012.
Alberta is poised to enter another period of prolonged economic expansion. Growing demand for energy from emerging markets is expected to keep oil prices elevated. The construction sector and service industries will also reap the benefits of expected investment in the energy sector. Real GDP growth will accelerate from 3.1 per cent in 2011 to 3.6 per cent in 2012.
British Columbia’s economy will grow at a more moderate pace of 2.6 per cent this year and 2.5 per cent in 2012, due a decline in government expenditure in infrastructure, and modest growth in consumer spending.
In spite of the setbacks in Manitoba’s agriculture sector this year, growth in the other goods-producing industries, along with gains in wholesale trade and transportation, supported growth of 2.1 per cent in 2011. Continued demand for buses and aerospace products will keep the province’s manufacturing sector performing strongly next year. Manitoba’s real GDP is expected to advance by 2.6 per cent in 2012.
The focus in Ontario and Quebec over the next few years will be on reducing public deficits. In addition to budgetary restraint, more moderate growth in private investment and consumer spending will limit overall growth in both provinces. Ontario’s real GDP is expected to rise by 1.8 per cent in 2011 and by 2.2 per cent in 2012. Quebec’s economy is expected to grow by 1.8 per cent in 2012, a slight improvement from the 1.5 per cent gain forecast for 2011.
Nova Scotia can look to the future with optimism, in spite of limited private investment growth and the provincial government’s austere fiscal measures. Natural gas production is expected to commence at EnCana’s Deep Panuke offshore field early next year and will help lift real GDP growth from 1.5 per cent in 2011 to 1.8 per cent in 2012. The multi-year $25 billion shipbuilding contract that was awarded to the Halifax Shipyard is expected to bring economic benefits starting in 2013, as work gets progressively underway.
Newfoundland and Labrador’s economy will slow in 2012 as the expansion in the mining industry reaches a more mature phase and oil production declines. Following an increase of 4.5 per cent in 2011, Newfoundland and Labrador’s real GDP growth will be limited to 0.4 per cent in 2012.
A lull in construction along with weak growth in manufacturing and fiscal austerity measures will weigh down New Brunswick’s economic growth. After a gain of just 0.7 per cent this year, New Brunswick economy is forecast to grow by a modest 1.5 per cent in 2012.
A rebound in Prince Edward Island’s manufacturing sector will offset lower public investment, keeping the province’s economy growing at a steady pace of 1.6 per cent in 2011 and 1.9 per cent in 2012.