British Columbia will be the only province expected to post growth of better than 3 per cent over the next two years. According to The Conference Board of Canada’s latest Provincial Outlook, real GDP is forecast to grow 3.1 per cent this year and 3.6 per cent in 2016.
“The bright outlook for the province is largely thanks to the construction industry. A major investment in a LNG project could get underway if all conditions are met,” said Marie-Christine Bernard, Associate Director, Provincial Forecast.
Manufacturing is expected to provide a solid base for the provincial economy over the next few years. Wood product manufacturing will get a boost this year from healthy U.S. home construction, while production of the non-combat vessels for the federal government is expected to ramp-up at the Seaspan Shipyards in Vancouver. The province’s manufacturing sector is poised to grow by 4.2 per cent in 2015 and will average 2 per cent growth from 2016 to 2020
The forecast for Atlantic Canada is mixed in 2016. Newfoundland and Labrador’s economy is set to contract again, Prince Edward Island and New Brunswick are expected to see modest growth, while the outlook in Nova Scotia is more favourable, according to The Conference Board of Canada’s latest Provincial Outlook.Economic growth in New Brunswick will be modest in 2015-16, before picking up speed in 2017, says Canada’s Conference Board.
Strong U.S. homebuilding activity will help support demand for New Brunswick’s wood products and drive up prices, which will allow some currently idle mills to restart operations. In all, New Brunswick’s real GDP is poised to advance by 1.7 per cent in 2015 and 1.6 per cent in 2016 before picking up speed in 2017.
As the economy picks up, employers will add to their payrolls. More than 8,000 new jobs are expected to be created in Nova Scotia over the next two years. Construction will be another bright spot in the provincial economy, with both residential and non-residential investment forecast to see double digit growth in 2016. However, as work is completed on several large-scale projects, construction activity will slow down in 2017.
In its five-year forecast, Canada’s Conference Board sees three big factors impacting the woodworking industry:
U.S. Housing Market—The continuing recovery in the U.S. housing market will support demand for Canadian wood products.
Domestic Housing Market—Despite recent strength in housing starts, the domestic housing market is expected to cool, translating into weaker demand for wood products.
Canadian Dollar—The weaker Canadian dollar is boosting industry prices, since the benchmark prices for many wood products is set in U.S. dollars.