The Royal Bank says most of Canada will experience stronger economic growth this year and next, but only Alberta will see the kind of gains that will make a real impact on job creation.
The latest quarterly report from Canada’s largest bank predicts the overall economy will expand by 2.4 per cent this year and 2.7 per cent in 2015, moderately stronger growth rates than the Bank of Canada expects. The RBC economists say they believe the U.S. economy is kicking into gear and that — combined with the lower value of the loonie — will result in more demand for Canadian exports.
Although most economists share the same view, the numbers so far have yet to show any real rebound in the hard-pressed export sector, particularly non-resource exports.
As has been the case in recent years, the RBC forecast sees a decidedly western tilt to economic activity and job growth this year and next. Alberta will lead the pack with a 3.7 per cent growth rate in 2014, slowing only moderately to 3.5 per cent in 2015. Employment in the province is expected to increase by 2.9 per cent this year, the same as in 2013, about three times the national average. That was underlined in last Friday’s labour market report from Statistics Canada which showed that of 85,500 jobs created in Canada over the last 12 months, 71,200 were in Alberta.
The report does contain some good news for Ontario, which will see an export-led revival to 2.3 per cent growth this year — the second-highest rate in the country — after advancing by a weak 1.3 per cent the previous two years. Still, new jobs will be scarce in Canada’s most populous province, RBC says. Employment is expected to grow in line with the national average, or 0.9 per cent.
The big surprise in the report is that Saskatchewan’s economy is projected to slow sharply to 1.4 per cent growth after a 4.5 per cent surge in 2013. The main reason is a reversal in the agriculture boom the province enjoyed last year, the bank said. However, the slowdown won’t last for long, with the bank predicting growth in Saskatchewan to rebound to about three per cent in 2015.
Projected provincial growth rates in percentage terms for 2014 and 2015 were: Newfoundland (0.6, 1.4); Prince Edward Island (1.4, 1.2); Nova Scotia (2.2, 2.2); New Brunswick (1.0, 1.4); Quebec (1.9, 1.8); Ontario (2.3, 2.8); Manitoba (2.1, 2.8); Saskatchewan (1.4, 3.0); Alberta (3.7, 3.5); British Columbia (2.1, 2.8).