Modest economic growth anticipated for New Brunswick cities in 2017, while St. John's economy will continue to struggle
OTTAWA, Aug. 3, 2017 /CNW/ - The economies of Moncton and Saint John are expected to see modest growth of 1.7 per cent and 1.3 per cent respectively in 2017, while in Newfoundland and Labrador, the St. John's economy is anticipated to contract by 1.1 per cent, according to The Conference Board of Canada's Metropolitan Outlook: Summer 2017.
"Although modest, economic growth in Moncton and Saint John will outpace the provincial average. Moncton's advance will be driven by strength in manufacturing, while Saint John will benefit from gains in its primary and utilities industry, which includes the forestry sector. Both metro areas are benefitting from the low Canadian dollar, which is boosting U.S. demand for their exports," said Alan Arcand, Associate Director, Centre for Municipal Studies, The Conference Board of Canada. "St. John's and the wider province continue to be hurt by soft commodity prices, the unwinding of major investment projects, and fiscal austerity and tax hikes."
Highlights
- Moncton's economy is expected to grow by 1.7 per cent in 2017.
- Real GDP growth in Saint John is forecast to ease from 2.4 per cent in 2016 to 1.3 per cent this year.
- Real GDP in St. John's is forecast to contract by 1.1 per cent this year, the second decline in the past three years.
The Moncton economy has outshined the rest of New Brunswick's for several years and this trend is expected to continue over the forecast. Real GDP in Moncton is expected to grow by 1.7 per cent this year and by 2.0 per cent in 2018, compared with gains of just 1.0 per cent and 1.2 per cent province-wide. This year's increase will be driven by the goods sector, as gains on the services side will be more muted. Indeed, Moncton's manufacturing industry is on track to start recovering this year, following five straight annual declines. The rebound is being sparked in part by ARS Canada Rolling Stock's new rail manufacturing plant. At the same time, construction output growth is anticipated to moderate but stay healthy, thanks to contributions from both the residential and non-residential markets. On a negative note, wholesale and retail trade output will take a hit as consumers tighten their purse strings due to a soft job market and an HST hike in 2016.
Real GDP growth in Saint John is forecast to slow from 2.4 per cent in 2016 to 1.3 per cent this year. Most of this year's advance will continue to come from the primary and utilities industry, which is reaping the benefits of a low Canadian dollar and solid demand for its products south of the border. However, these gains will be offset by weakness elsewhere. The local manufacturing sector, which has struggled with weaker exports of petroleum products, will see almost no growth for the second year in a row in 2017, partly due to U.S. countervailing duties on Canadian softwood lumber. Fortunately, since New Brunswick-based J.D. Irving harvests timber largely from private forests rather than on Crown land, duties on their products will be set at only 3.02 per cent, softening the blow on New Brunswick and Saint John. Like Moncton, consumers in Saint John are expected to take a step back from spending in 2017 and 2018. This will hold average annual growth in wholesale and retail trade output to just above 1.0 per cent over the near term.
The St. John's economy continues to struggle in tandem with the overall provincial economy. Real GDP is forecast to contract by 1.1 per cent this year, the second decline in the past three years. At the same time, employment is expected to drop by 2.3 per cent—the biggest decline since 1992. Despite these lingering issues, the St. John's economy is expected to rebound in 2018 and 2019, thanks to rising oil prices and a pickup in production at the new Hebron offshore oil field.
The Metropolitan Outlook: Summer 2017 is The Conference Board of Canada's analysis of 15 medium-sized Canadian census metropolitan areas (CMAs). Alan Arcand will present detailed findings from this report at a live webinar on August 31, 2017 at 11:00 AM EDT.
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SOURCE Conference Board of Canada
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