British Columbia is expected to take the lead among the provinces in 2015 in terms of economic growth in Canada, according to a Conference Board of Canada report released December 9.
Increasing household demand and a strong manufacturing and construction sector will contribute to a projected increase of 3.1% in B.C.’s gross domestic product (GDP) in 2015, the board said. This will be driven in part by federal shipbuilding contracts.
In 2014, GDP growth of 2.7% is projected in B.C. The province’s exports are expected to increase over the near term, and the trend over the past two years that saw slow growth is expected to be reversed.
Weak job growth has been a major factor holding back GDP gains in the past couple years, and this is also expected to turn around, according to the report.
B.C.’s unemployment rate is expected to drop from 6.6% this year to 6.5% in 2014 and 6.0% in 2015. Low inflation will lead to real wage gains, boosting consumer spending. B.C.’s services sector is also expected to recover as job creation improves over the next couple years.
Recovering home construction in the United States and strong demand from China will lead to improvements in the province’s forestry sector over the near term, the Conference Board said. “Double-digit” gains are expected in 2014.
Mining is also expected to get a boost from metal mining and unconventional gas drilling and production, as well as development and exploration of shale gas resources.
Across Canada, most provinces will see improving economic growth in 2014 and 2015, said the report, with real GDP increases of 2.3% and 2.6%, respectively. The U.S. economy will be stronger over the next two years, improving Canada’s outlook further as business capital investment will be strong. A slow recovery in Europe, however, will have a hampering effect on Canada’s strengthening economy.
Increasing business and consumer confidence will drive Canada’s economy over the next two years. Unemployment will drop from 7.2% this year, the report said, to 7.0% in 2014 and 6.4% in 2015.
Alberta is expected to have the fastest-growing economy in 2014, continuing its trend of being the biggest contributor to economic growth across the country for three consecutive years. Oil sands investments and a strong labour market are expected to drive a 3.4% growth in that province in 2014.
