Growth, But Barely, Ahead For New Brunswick’s Economy
HALIFAX – Atlantic Canada is looking at continued modest economic growth according to the latest fall report from the Atlantic Provinces Economic Council (APEC).
“Exports in 2016 should be supported by firmer US growth and a lower Canadian dollar but provincial fiscal policy will remain in restraint mode,” says David Chaundy, APEC’s Senior Economist.
Though limited job creation will constrain consumer spending, Chaundy says a continuation of this year’s relatively strong wage gains will ensure some income growth.
“Atlantic businesses may need to get use to a slower growth environment in the region as minimal population growth and an aging workforce lead to slower gains in labour supply and consumer demand,” he said.
APEC expects economic growth to recover to about 0.9% for New Brunswick in 2016. Real GDP growth is expected to remain close to 1 per cent next year as continued improvements in exports are tempered by a decline in investment.
In Nova Scotia, APEC forecasts a drop in natural gas output will keep economic growth to 0.5 per cent this year, but they expect that a strong gain in major project investment and a full year of production on the shipbuilding project, should push real GDP growth to 1.5 per cent in 2016.
The organization expects that in Prince Edward Island, export revenues will compensate for soft domestic activity, enabling the provincial economy to expand by 1.1 per cent in 2015. Weak demographic trends will continue to hamper domestic demand and will keep growth in 2016 to 1.3 per cent.
Meanwhile in Newfoundland and Labrador, APEC predicts falling oil production will contribute to an overall decline of 4 per cent in real GDP this year. They expect a recovery in oil output should push growth into positive territory (0.8 per cent) next year, despite major project investment receding from its recent peak.
Chaundy said Atlantic businesses can react to this ‘slower for longer’ environment by pursuing new opportunities in larger and faster-growing national or international markets. They also could consider seeking local acquisitions to consolidate their market position and maximizing economies of scale.