Alberta and Saskatchewan compete for title of fastest-growing provincial economy
Ottawa – The Western provinces remain in the best position to ride out the current global economic weakness, and Ontario is seeing bright spots in export growth and business investment for 2013, according to The Conference Board of...
Ottawa – The Western provinces remain in the best position to ride out the current global economic weakness, and Ontario is seeing bright spots in export growth and business investment for 2013, according to The Conference Board of Canada’s Provincial Outlook-Autumn 2012.
“Canada’s economy is muddling through the second half of 2012 and into 2013. The weakness has been relatively broad-based across industries, as the struggles of the global economy have hit home,” said Marie-Christine Bernard, associate director, provincial outlook. “Some of the weakness is coming from the mining, oil, and gas extraction sector. Most provinces are feeling the weight of lower commodity prices.”
For the most part, Western Canadian provinces have been relatively shielded from the fiscal and economic troubles lingering in external markets. The economies of Saskatchewan and Alberta in particular have performed strongly, and their near-term prospects are more favourable than those for the rest of the country. For both provinces, real economic growth will remain at or above three% through 2014.
Development of the oil sands is expected to continue to drive economic growth in Alberta, despite the recent slide in oil prices. Tight labour markets – the unemployment rate is down to 4.5% – have boosted wages and consumer spending. Alberta is forecast to lead all provinces in growth for the second consecutive year, with real GDP set to expand by 3.4% in 2012.
Capital expenditures in Saskatchewan’s potash industry are accelerating, putting the province on track to overtake Alberta in 2013 and 2014 as the fastest-growing economy in the country.
Manitoba and British Columbia are also poised for solid growth in the next two years. Coming off a tepid performance in 2012, British Columbia is forecast to grow by 2.7% in 2013 and at a similar pace in 2014 – thanks to improving U.S. housing demand, solid employment growth and rising consumer confidence.
Widespread gains in several industries and a strong year for agriculture have put Manitoba on pace for robust growth of 2.5% in 2012, and growth is expected to exceed two% in each of the next two years.
Ontario’s economy has withstood fiscal austerity at both the federal and provincial levels of government, as well as global economic uncertainty in 2012. A solid rebound in vehicle demand in the United States has bolstered Ontario’s manufacturing exports. Furthermore, businesses are taking advantage of the strong dollar to invest in retooling their operations. Although growth of only 1.8% is expected in 2012, Ontario’s economy will pick up speed in the next two years.
Quebec and Atlantic Canada are barely growing this year, although modest gains are expected in 2013 and 2014. A weak job market, combined with tax hikes that squeezed consumers, and flat export growth curtailed Quebec’s economy to growth of just 0.9% in 2012.
At 1.1%, Prince Edward Island is the province with the highest growth forecast for the Atlantic region in 2012. Nova Scotia’s economy is forecast to expand by just 0.6% and growth in New Brunswick will settle in at 0.5%. The Newfoundland and Labrador economy is expected to shrink in 2012, due to a slowdown in mining and oil and gas production – although, excluding resource extraction, the province is still doing well.