Halifax to be among economic growth leaders in 2016, while little growth expected in St. John's, Newfoundland
OTTAWA, March 3, 2016 /CNW Telbec/ - While Halifax is expected to post stronger economic growth in 2016 than it did in 2015, Saint John and Moncton should experience slightly slower real GDP growth this year. Meanwhile, the economy of St. John's, Newfoundland is expected to remain flat in 2016, according to The Conference Board of Canada's Metropolitan Outlook: Winter 2016.
"Driven by a thriving manufacturing sector and strong construction activity, Halifax is expected to be among the country's growth leaders in 2016, behind only Vancouver," said Alan Arcand, Associate Director, Centre for Municipal Studies, The Conference Board of Canada. "At the other end of the spectrum, St. John's, Newfoundland will continue to face difficult economic conditions due to low oil prices and a slowdown in the local construction industry."
- Halifax, Moncton and Saint John, New Brunswick, are expected to post real GDP growth of 2.9 per cent, 2.3 per cent and 2 per cent, respectively.
- St-John's, Newfoundland and Labrador, should see a meagre 0.5 per cent increase in its real GDP this year.
- Vancouver's real GDP is forecast to grow 3.3 per cent, making it the fastest growing economy among the census metropolitan areas covered in this edition of the Metropolitan Outlook.
The city's manufacturing sector has been thriving ever since Irving Shipbuilding started work on the $3.5 billion contract under the National Shipbuilding Procurement Strategy to build combat ships for the Royal Canadian Navy. This massive project is forecast to lift output in Halifax's manufacturing sector by 10.6 per cent in 2016. Moreover, the construction industry is also expected to post output growth of 7.3 per cent this year, with work underway on projects, such as the Nova Centre, the replacement of the suspension plans on the MacDonald Bridge, and the multi-year upgrade to Pratt and Whitney's engine blade manufacturing facility near the Halifax airport. The booming manufacturing sector will, in turn, help boost transportation and warehousing output, forecast to grow by 4.7 per cent in 2016. On the other hand, resources, agriculture and utilities output is expected to contract for a second year in a row, in line with lower offshore production of natural gas at Deep Panuke. In all, Halifax's real GDP is forecast to rise by 2.9 per cent in 2016.
Economic growth in Moncton is expected to slow somewhat from 2.7 per cent in 2015 to 2.3 per cent in 2016. The city's manufacturing and construction sectors are expected to finally start recovering in 2016, following four consecutive annual declines. A low Canadian dollar and healthy U.S. economy should help to boost the export-oriented manufacturing sector in 2016, with output forecast to expand by 1.8 per cent this year. The outlook for Moncton's construction sector is also bright, as work on the new $107 million downtown entertainment and sports centre will finally begin. However, this will be somewhat offset by moderating growth in other industries, such as in finance, insurance and real estate, as well as in wholesale and retail trade. Indeed, among the city's eight service-producing industries, only the information and cultural industries and business services sector are forecast to expand at a faster pace this year than last.
Saint John, New Brunswick
Saint John, New Brunswick, the second largest city in the Maritimes, is expected to post real GDP growth of 2 per cent in 2016, down from 2.4 per cent in 2015. Continued growth in the U.S. housing market and a low Canadian dollar are expected to bode well for the forestry sector. Ongoing upgrades to the region's Irving pulp and paper mill to allow for increased capacity should help as well. Resources, agriculture and utilities output is forecast to grow by 5 per cent in 2016. At the same time, services sector output is projected to improve slightly from 1.8 per cent last year to 2 per cent this year. However, the city's manufacturing output will only see growth of 0.7 per cent this year, as the sector struggles to bounce back from weakness in the second half of last year. Meanwhile, output growth in Saint John's construction industry will be limited to a meagre 0.3 per cent, due to weak new housing activity.
St. John's, Newfoundland
The St. John's economy is expected to expand by a meagre 0.5 per cent in 2016, following a similarly disappointing 0.1 per cent gain in 2015. Stagnant output growth in resources, agriculture and utilities, the area's largest industry, and continued declines in the construction sector, will be offset by steady services sector gains. Despite weak oil prices, oil from the South White Rose extension began flowing in the second half of last year, and this will allow resources, agriculture and utilities output to eke out a 0.1 per cent increase in 2016. Meanwhile, the city's construction sector is forecast to contract once again, in line with weaker non-residential investment and a slowing new housing market. Total construction output tumbled by a total of about 15 per cent over the past two years and is forecast to fall by a further 7 per cent in 2016. The services sector is expected to post output growth of 1.5 per cent in 2016, similar to the 1.6 per cent expansion last year. Unfortunately, the weak economic activity is bad news for the region's job market, employment is expected to fall 0.4 per cent this year.
Released today, Metropolitan Outlook: Winter 2016, is The Conference Board of Canada's once-a-year analysis of 28 Canadian census metropolitan areas (CMAs).
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SOURCE Conference Board of Canada
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