“Despite the signs pointing to slow economic performance this year, the worst-case scenarios of a deep recession or highly destabilized labour and capital markets are becoming less likely,” said Ted Mallett, Director, Economic Forecasting at The Conference Board of Canada. “We anticipate that the hospitality, transportation, arts and recreation sectors will be at the leading edge of growth through 2025.”
The Conference Board of Canada estimates that Newfoundland and Labrador’s GDP contracted 1.8 per cent in 2022 but will rebound by 2.2 per cent in 2023 and 2.1 per cent in 2024, driven by a resumption of oil production from the Terra Nova platform. Employment in the province will remain relatively stable in 2023, as the economic slowdown continues to affect the services-producing industries.
High commodity prices are expected to continue supporting Alberta’s GDP growth in 2023. The agricultural sector looks favourable in 2023, following a recovery from the drought in 2021. The biggest concerns for Albertan farmers involve uncertainty about demand concerns and input price uncertainty. The province’s GDP is forecast to be 2.1 per cent in 2023, before accelerating to 2.8 per cent in 2024.
Saskatchewan’s mining and agriculture sectors are expected to be strong drivers of growth again in 2023. Farm receipts are expected to post a bigger increase in Saskatchewan than in any other province in Canada, as the province continues its supply-driven recovery following the drought in 2021. The Conference Board of Canada forecasts Saskatchewan’s GDP to expand 1.6 per cent in 2023, followed by a 2.0 per cent gain in 2024.
Manitoba’s strong agriculture performance in 2022 is expected to continue in 2023. Despite the growing concern over rising input costs, crop price volatility presents the biggest risk factor for the agriculture sector, however, The Conference Board of Canada expects that to ease in 2023. Real GDP for the province is projected to be 0.9 per cent in 2023, followed 2.2 per cent in 2024.
With nearly all pandemic restrictions lifted in Prince Edward Island, the tourism sector and Canada Winter Games are expected to be major contributors to the Island’s economy this year. However, the agriculture and fishing sectors are still dealing with damages from Hurricane Fiona. The Conference Board of Canada forecasts the province’s GDP to expand 0.9 per cent in 2023 and 2.5 per cent in 2024.
Ontario’s high-skilled sectors such as professional, scientific, and technical services will see output growth above the national rate this year and next, while the manufacturing sector will contract in 2023 due to slower global demand, particularly in the durables sector. The Conference Board of Canada forecasts Ontario’s GDP to grow 0.5 per cent in 2023, before rebounding to 2.5 per cent in 2024.
Exposure to higher debt costs is a particular concern in British Columbia, where household indebtedness is among the highest in Canada. Supported by immigration and net positive interprovincial migration, the province’s population will expand at an average annual rate of 2.0 per cent, exceeding the national growth rate of 1.8 per cent. The province’s GDP will expand 0.4 per cent in 2023 before growing to 2.6 per cent in 2024.
Despite the anticipated economic downturn for Canada’s trading partners, demand for fishing and agriculture products will help exports to keep expanding, acting as a bright spot for Nova Scotia’s economy. Increases in shelter and energy costs were more pronounced in Nova Scotia than most provinces. As a result, real household consumption in the province is expected to decrease this year. The Conference Board of Canada projects GDP in the province to increase 0.3 per cent in 2023.
Monetary policy is gradually filtering through to several areas of Quebec’s economy, notably investment and consumption. Demand for housing in the province is waning in response to higher interest rates and will remain tepid in the coming years given relatively weak projected population growth. Quebec’s GDP growth is forecast to be 0.2 per cent in 2023, followed by 2.0 per cent in 2024.
New Brunswick continues to see a growing population, which expanded 2.7 per cent year-over-year in the third quarter of 2022, driving an increase in housing demand that is expected to continue in 2023 despite higher interest rates. The Conference Board of Canada forecasts New Brunswick’s economy to expand just 0.1 per cent in 2023 before reaching 1.8 per cent in 2024.
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