Nova Scotia is seeing its biggest population increase in more than 30 years, bolstering labour demand and pushing up wages, according to the Royal Bank of Canada in its provincial outlook released on Friday.
The province’s housing market is benefitting from the population growth, with strong demand and limited inventory pushing Halifax housing prices to record levels.
RBC highlighted Nova Scotia’s increasing exports to China, which soared 26 per cent amid trade tensions between the Asian superpower and the United States. The rise in exports coupled with strong consumer spending has kept Nova Scotia’s economy afloat, as lower capital investment offshore and the end of natural gas production weighed on the economy, the report said.
The province’s capital plan will also stimulate the economy, with the report saying major highway projects and health care facilities will help underpin economic activity in the coming years.
Prince of economic power
Meanwhile, Prince Edward Island’s red-hot economy is expected to continue roaring in the new year, with new research forecasting the province’s economic growth will once again outpace the rest of Atlantic Canada in 2020.
RBC Economics said P.E.I.’s mighty economy will accelerate at a more modest two per cent next year, falling slightly behind British Columbia after leading the country in 2019.
“There's still quite a bit of momentum,” said Robert Hogue, a senior economist with RBC, noting that strong exports and a surging population have buoyed the island's economy.
The report also said new residential construction jumped 15 per cent across the province this year. With building permits up 30 per cent, housing construction is poised to continue ramping up in 2020 to meet the demands of the growing population.
Newfoundland losing people
The population figures from Newfoundland and Labrador tell a very different tale. The province is on track to lose 3,760 people in 2019, leaving the province 0.7 per cent smaller.
The bank said international immigration has failed to make a dent in Newfoundland due to high outmigration to other provinces.
Hogue said the deteriorating demographic situation is expected to continue to restrain the economy’s momentum in the years ahead.
Even though employment has edged up 1.3 per cent this year – curbing the unemployment rate to a five-year low of 11.1 per cent – he said it’s still high.
“It makes it tough to retain people or attract people to the province,” Hogue said in an interview.
While Newfoundland’s economy is still projected to grow 1.1 per cent next year, economists are forecasting it will shrink 0.5 per cent in 2021. They also warn about the rising cost of electricity rates – and the impact on provincial coffers to keep power costs affordable – as Muskrat Falls comes online.
New Brunswick 'double whammy'
In New Brunswick, a so-called “double whammy” lowered exports by 3.5 per cent so far this year.
The bank said the province’s economy has struggled with the ongoing fallout of a 2018 refinery explosion at Irving Oil’s Saint John facility.
New Brunswick’s forestry exports have also been slammed by U.S. trade tariffs on lumber products.
While the provincial outlook report said growth in refined oil products will pick back up by the end of the year, removal of softwood lumber duties remains uncertain.
Across Canada, British Columbia – the only province forecasted come out ahead of P.E.I. in 2020 – is expected to grow by 2.4 per cent next year, according to the bank.
It said the ramping up of a blockbuster multi-billion-dollar LNG Canada project will set B.C. apart in the country.
RBC also said “easing pressure” in the energy sector will help dispel some of the gloom that has settled over the Prairies.