Ottawa – Weak business investment intentions and sluggish job creation will keep Canada’s economy to growth of 2% in 2014, according to The Conference Board of Canada’s Canadian Outlook: Summer 2014.
“The unusually cold winter got economic growth off to a slow start this year, but that’s not all that is ailing the Canadian economy,” said Glen Hodgson, senior vice-president and chief economist, The Conference Board of Canada. “Overall, the domestic economy remains lethargic. The business sector seems to be holding back on hiring and investment, governments are by and large in restraint mode, and households are seeing their purchasing power erode.”
The continued slow pace of growth in private investment is now the lagging edge of the Canadian economy. Private investment grew by 13.5% in 2010 as the economy recovered from the global recession, but the pace of investment growth has slowed step by step over the past three years. The Conference Board projects private investment to grow by only about 1% in real terms in 2014 before picking up in 2015.
Canada’s job markets has been sluggish over the past two years and unfortunately the situation did not improve over the first half of 2014. From January through June of this year, fewer than 53,000 jobs were created. Excluding the 2009 recession year, the Canadian labour market is on track for one of the weakest annual gains since 2001. Job creation is forecast to grow by only 1% in 2014.