Western province’s unfazed by economic downturn: CBOC
Growth in manufacturing and mining are expected to keep the West on top.
OTTAWA: The demographic and economic clout of Canada’s western provinces is expected to continue to grow, according to the Conference Board of Canada’s Provincial Outlook-Winter 2012.
The recently-released 2011 Census revealed the western provinces are a magnet for new arrivals. Strong commodity prices are expected to boost the western economies over the next two years.
“The recent economic slowdown is now barely noticeable in Western Canada,” said Marie-Christine Bernard, Associate Director, Provincial Outlook. “Despite concerns over global growth and the lasting fiscal problems inEurope, growth in the Western Canadian provinces is expected to be a full percentage point stronger than in the rest of the country this year and next.”
The Canadian economy is forecast to post real growth in gross domestic product (GDP) of 2.1 per cent in 2012. All four western provinces can expect growth at or above that level this year, while none of the other six provinces will grow by more than 1.9 per cent.
Alberta is expected to lead all provinces both in 2012 and 2013, with economic growth forecast to be 3.3 per cent this year and 4 per cent next year. Global oil prices are expected to remain high, boosting construction and expansion of oil sands projects. By 2013, the province’s unemployment rate is expected to plummet to 4.5 per cent.
Saskatchewan is already experiencing tight labour markets and its unemployment rate in 2013 is forecast to match that of Alberta. After a gain of 5.2 per cent last year, Saskatchewan’s real GDP growth will ease to 2.6 per cent in 2012 and accelerate to 3.5 per cent next year.
Mining and manufacturing are among the province’s strongest sectors this year.
Manitoba’s agriculture, manufacturing and utilities sectors are expected to perform well in 2012. Overall, the provincial economy is expected to grow by 2.7 per cent in 2012 and by 2.6 per cent in 2013.
British Columbia is being held back by external factors, such as moderating growth in China and a modest improvement in the U.S. housing market, which will finally generate some gains in the forestry industry. But restrained public sector spending will dampen construction. All in all, British Columbia’s economy will grow by 2.1 per cent this year and real GDP growth will accelerate to 3.6 per cent in 2013.
Ontario’s economy will feel the pinch of deficit-reduction efforts at both the federal and provincial levels. Ontarians’ real after-tax incomes will post only a small gain in 2012 as both employment and wages advance at a moderate pace. As a result, Ontario’s economy will grow by just 1.9 per cent in 2012, although stronger growth of 2.8 per cent is expected in 2013.
Quebec has a few bright spots in its outlook, notably strong business investment in Northern Quebec’s mining sector. But lower public infrastructure investment, a weak labour market and declining real disposable income will limit real GDP growth to 1.4 per cent in 2012.
The Maritime provinces face modest growth prospects. Nova Scotia’s economy will grow by 1.5 per cent in 2012, but 2013 offers a brighter outlook thanks to new natural gas production and stronger manufacturing. New Brunswick can also expect growth of 1.5 per cent this year, following a long-awaited rebound in the job market. The end of fiscal stimulus in Prince Edward Island will limit the Island’s real GDP growth to 1.4 per cent in 2012.
Newfoundland and Labrador’s economy is in transition. The oil and natural gas industry has reached peak production, but iron ore mining in Labrador is on the upswing. The province’s economy is forecast to grow by just 0.7 per cent in 2012, before accelerating to 2.1 per cent in 2013. Strong employment and wage gains mean that the province is attracting workers rather than losing them.