New report highlights significant challenges ahead
Canadian provinces are poised for sluggish economic activity and limited growth for the rest of this year and into 2024, according to the latest market outlook from The Conference Board of Canada.
However, while signs of slow performance ahead are aplenty, “the fog of uncertainty appears to be clearing,” the board said in its analysis. “Worst-case scenarios of a protracted recession or highly destabilized labour and capital markets are becoming less likely.”
“The economy is hitting a wall,” the board’s chief economist Pedro Antunes told The Canadian Press. "We’re essentially seeing economic activity flattening out."
The most robust rate of economic growth this year will be seen in Newfoundland and Labrador (up by 2.2% in 2023), especially considering recent developments surrounding the Terra Nova offshore platform.
“We forecast a strong rebound in the oil and gas sector this year, with production resuming at the Terra Nova platform after its overhaul in Spain,” the board said. “Increasing oil production will more than offset the effects of a slowdown in the services-producing sectors.”
Other provinces expected to post positive performances are Alberta (up by 2.1%) and Saskatchewan (up by 1.6%), with their strength stemming from various recovering sectors.
“Alberta’s oil and gas sector saw a nice end to 2022, with increased drilling activity leading to higher production,” the board said. “Stable oil prices are expected to benefit the sector in 2023 and beyond.”
“The catalyst of Saskatchewan’s growth in 2023 will come from the agricultural sector as this year could be another strong one in terms of crop production,” it added. “Farm receipts are expected to post a bigger increase in Saskatchewan than in any other province in Canada.”