Slow and stable growth for Halifax economy in 2017; stronger growth awaits in 2018

OTTAWA, Oct. 17, 2017 /CNW/ - Halifax's economy is expected to grow by 1.4 per cent in 2017, similar to last year's 1.5 per cent increase, according to The Conference Board of Canada's Metropolitan Outlook: Autumn 2017. The economy is expected to pick up steam next year, with growth forecast to hit 2.2 per cent, the strongest gain since 2011.

"Halifax's economy has been on a slow and stable growth path for several years, but next year looks better. The 2018 outlook will be bolstered by a rebound in construction and continued strength in manufacturing, the latter thanks to ongoing shipbuilding work. This will help to offset what is expected to be the fourth consecutive decline in primary and utilities output," said Alan Arcand, Associate Director, Centre for Municipal Studies, The Conference Board of Canada.

Highlights

• Halifax's economic growth is expected to reach 1.4 percent in 2017 and 2.2 per cent in 2018.
• The region's manufacturing sector will remain a key economic contributor, posting 1.9 per cent and 3.9 per cent output growth, respectively, this year and next.
• Calgary and Edmonton are forecast to be the fastest growing census metropolitan areas (CMAs) in Canada this year, with real GDP forecast to grow by 4.6 per cent and 3.9 per cent respectively.

Output in Halifax's primary and utilities sector has fallen in five of the past six years, and further declines are projected this year and next. These declines have been due in large part to maturing offshore natural gas sector, with both the Sable and Deep Panuke sites entering their final phases.

Likewise, local construction output is on track to decline 2.8 per cent this year, as non-residential investment activity has weakened due to the winding down of major projects. On a more positive note, a second-quarter surge in both single and detached multi-family starts has set the stage for a 15 per cent increase in housing starts this year. Fortunately, housing starts are expected to remain healthy next year and non-residential investment activity to pick up, driving a 4.2 per cent rebound in construction output in 2018.

At the same time, output growth in the local manufacturing sector is forecast to accelerate from 1.9 per cent this year to 3.9 per cent next year, with the expansion continuing to be driven by the multi-year, multi-billion-dollar contract to build ships for the Canadian navy, part of the National Shipbuilding Procurement Strategy.

Halifax's services sector is forecast to gain momentum over the next two years. Strength will come from several sectors including wholesale and retail trade, the finance, insurance and real estate sector and professional services.

Job growth is on track to reach only 0.1 per cent this year, but is forecast to accelerate to 1.5 per cent in 2018. The improving job picture should keep consumers spending. As a result, retail sales are forecast to increase by 4.5 per cent in 2017 and by 2.9 per cent in 2018.

Calgary is expected to boast the fastest-growing metropolitan economy this year among the 13 census metropolitan areas covered in this edition of the Metropolitan Outlook.

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SOURCE Conference Board of Canada