Although oil prices seem to have stabilized, Alberta’s economy will post an overall decline in real gross domestic product (GDP) this year, according to The Conference Board of Canada’s Provincial Outlook: Spring 2015.
“Alberta’s economic performance will be underwhelming this year and next, especially compared with recent years,” said Marie-Christine Bernard, Associate Director, Provincial Forecast, The Conference Board of Canada. “Oil prices remain well below break-even levels for most new projects in the oil patch, and conditions are not expected to turn around until sometime next year.”
Reminiscent of last year, the Ontario economy got off to a slow start this year. The weakness, however, will be temporary, as economic growth should pick up in the coming quarters. Overall, real gross domestic product (GDP) is forecast to expand by 2.6 per cent in 2015 and 2.3 per cent in 2016.
“Ontario has not performed up to expectations, but the outlook over the short term remains positive, as strength in the United States economy will help bolster the province,” said Bernard. “Along with exports, consumer spending will continue to increase at a good pace in Ontario, fuelled by improving consumer confidence.”
Saskatchewan’s economy will feel the effects of the drop in oil-related activities in 2015. However, the province is not expected to fall into recession this year, as other industries will keep the economy growing.
“With the oil sector an important part of the Saskatchewan economy, the province is feeling the impact of lower oil prices. The number of wells drilled was down this past winter, and capital expenditures in the energy sector are not expected to recover until 2017,” said Bernard. “However, strength in potash and metal mining, as well as a rebound in the agriculture sector, will temper the impact of lower crude oil prices on Saskatchewan’s economy.”
Manitoba’s economic performance will be one of the strongest among the provinces in 2015 and 2016.
Manitoba is expected to post real GDP growth of 2.8 per cent in 2015 and again in 2016, when it will lead all provinces.
“As a wind of change blows through the country thanks to the slide in oil prices, Manitoba will be one of the country’s strongest economic performers until at least 2016,” said Bernard. “Strong growth in construction, a rebound in agriculture, and stable domestic demand are expected to lift labour markets and increase disposable household income for Manitobans.”