OTTAWA, July 27, 2012 /CNW/ - Weakening growth in emerging markets,
Europe's fiscal and economic woes, and sluggish job creation in the
United States are weighing on growth in the provincial economies.
Despite the global economic uncertainty, The Conference Board of
Canada's Provincial Outlook-Summer 2012 forecasts solid growth in Western Canada this year and next. Central
and Atlantic Canadian economies will slowly gain traction over the same
"For the most part the outlook for the provinces remains positive,
despite the bumpy ride in the short term," said Marie Christine Bernard, Associate Director, Provincial Outlook. "Interest in developing
natural resources across Canada will provide a solid foundation for job
creation and income prospects in the years to come, so that stronger
economic growth can be expected next year and in 2014."
The swoon in prices for many commodities in recent months will have an
impact on resource sector profits. Most metals and minerals prices,
however, remain relatively high - which will continue to drive
exploration activity and new mine construction.
The Alberta economic outlook is generally positive - growth of 3.8 per
cent in 2012 is forecast, highest among all the provinces. But weak
natural gas prices and volatile crude oil prices—particularly the wide
spread between Canadian crude and the international benchmark- are
leading to uncertainty about future capital spending plans in the
energy sector. The Conference Board forecasts that prices will remain
sufficiently elevated so that energy sector investment continues to
grow strongly in Alberta. In addition, the province has positive
outlooks for employment, income growth and consumer spending.
After three poor years for agriculture in Manitoba, a recovery in the
sector will help boost overall real gross domestic product (GDP) in the
province this year. Stronger growth in the mining, manufacturing and
construction industries will also contribute to a gain of 2.9 per cent
in 2012. Furthermore, Manitoba's average unemployment rate will edge
down from 5.4 per cent in 2011 to 5.2 per cent in 2013.
Cuts in potash production earlier this year will lower Saskatchewan's
bottom-line growth to 2.4 per cent, half its 2011 growth. But the
provincial economy is forecast to lead all provinces in real GDP growth
in both 2013 and 2014, thanks in large part to a rebound in the
non-metal mining sector.
British Columbia's forecast is generally positive over the next two
years, with real GDP growth of 2.3 per cent in 2012 and 2.8 per cent in
2013. The mining sector - thanks to increasing unconventional natural
gas production - will help offset more moderate export demand for the
manufacturing and forestry sectors. Strong employment gains will
support the province's domestic economy.
Despite a more pessimistic outlook than previously forecast for its main
trading partners, Ontario's economy is holding up fairly well and
growth of 2.1 per cent is forecast this year. Exports are a bright spot
in the outlook, in part due to surging U.S. vehicle sales. As the
public sector share of GDP eases slightly, households and businesses
will fuel growth this year.
Public sector fiscal restraint and a weakening housing market are among
the factors limiting growth in the Quebec economy to 1.4 per cent in
2012 and 1.8 per cent in 2013. One bright spot is the mining industry,
due to a rapid increase in iron ore production along with the
development of several new mines. Quebec's overall exports, however,
are still not growing strongly.
A turnaround in Prince Edward Island's goods-producing sectors,
particularly manufacturing and primary industries, will bring the
Island's economy to the front of the pack in the Maritimes with growth
of 1.5 per cent in 2012. Despite a squeeze in public spending as the
provincial government looks to balance its books, a similar outlook is
forecast for 2013.
Nova Scotia's real GDP is forecast to grow by just 1.2 per cent this
year as weakness in the construction industry, public sector austerity
and only a slow comeback in consumer spending is in store for the
province. Similarly, New Brunswick's economy is expected to advance by
only 0.7 per cent this year. Both provinces can expect a better
performance in 2013. New Brunswick in particular is forecast to grow by
2 per cent in 2013 due to improvement in manufacturing and a major jump
in mining production. Real GDP in Nova Scotia is expected to advance by
1.8 per cent in 2013.
Newfoundland and Labrador's economy is forecast to gain just 0.7 per
cent in 2012. Total oil production will decline by 18.5 per cent this
year, due to maintenance work at the Terra Nova and White Rose offshore
petroleum projects. Otherwise, the Newfoundland and Labrador economy is
healthy - for example, the construction industry is on pace to expand
by 23.5 per cent in 2012.
SOURCE: CONFERENCE BOARD OF CANADA
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Brent Dowdall, Media Relations, Tel.: 613- 526-3090 ext. 448