Rays Of Sunshine on the Horizon for Atlantic Economies
Ottawa, March 8, 2016–With the exception of Nova Scotia, the provincial economies of Atlantic Canada are facing more modest growth prospects this year but all is not negative, according to The Conference Board of Canada’s Provincial Outlook: Winter 2016.
“Faced with large fiscal deficits and an aging population, the East Coast provinces have struggled the last few years and these structural factors will continue to weigh on their economies over the near term,” said Marie-Christine Bernard, Associate Director, Provincial Forecast. “The one exception will be Nova Scotia, which will be one of four provinces in Canada to generate economic growth of more than 2 per cent this year.”
- With real GDP expected to rise by 2.1 per cent, Nova Scotia will lead the Atlantic region in growth. Newfoundland and Labrador will see no growth this year as the slump in commodity prices continues to weigh on the economy.
- New Brunswick will see growth of only 0.8 per cent in 2016.
- P.E.I. can expect real GDP to rise by 1.7 per cent this year.
- Expected to expand at 2.7 per cent, B.C.’s economy will outpace all other provinces this year.
Nova Scotia is expected to lead the Atlantic provinces, with real GDP set to rise 2.1 per in 2016. The province’s construction and manufacturing sectors performed well last year and are expected to continue to fuel economic growth this year and next. Strength in U.S. consumer demand and the lower Canadian dollar will help boost tire production, seafood product sales, and demand for frozen food. This, combined with continued work on the first arctic offshore patrol ship to be delivered under the frigate program, will raise manufacturing output by 4.5 per cent this year. Nova Scotia’s construction industry can also expect strong growth this year and next as it benefits from a number of major non-residential construction projects under development, as well as an increase in residential investment.
Prince Edward Island should see steady economic growth of 1.7 per cent this year. The Island will benefit from strong housing demand and a solid increase in manufacturing prompted by the weak Canadian dollar and robust U.S. household consumption. The provincial government’s attempts to balance its books by 2016–17 will limit near-term government spending and, in turn, translate to weaker growth in non-commercial services.
The unexpected shutdown of the Picadilly potash mine in January has dampened New Brunswick’s economic outlook. With no major investment projects planned in 2016, growth in the province’s construction sector will be modest. On a positive note, forestry and manufacturing will benefit from the strength in U.S. consumer demand and the lower Canadian dollar. Despite the setbacks, New Brunswick’s real GDP is expected to inch up 0.8 per cent in 2016. The province will continue to struggle with poor job creation and employment is expected to remain largely unchanged over the next two years.
The slump in commodity prices continues to weigh on the outlook for Newfoundland and Labrador. After contracting by 5.4 per cent in 2015, the province’s economy is expected to post no growth this year. Oil production is expected to decline again in 2016, and that trend will persist until the Hebron project starts producing in late 2017. Labour markets will continue to feel effects of the weakening economy. The unemployment rate is expected to remain elevated through the first half of the year as more workers return from the oil patch in Western Canada. One bright spot in the province’s economy will be manufacturing. Nickel, copper, and cobalt ore processing at the Long Harbour hydromet facility should help offset some of the weakness in offshore oil production and the construction sector.
For more information contact