HALIFAX, NS – Newfoundland and Labrador’s real gross domestic product (GDP) is expected to contract slightly next year, according to the Atlantic Provinces Economic Council (APEC).
Despite oil production starting at the Hebron oil field in 2018, the real GDP is projected to decline by 0.5 per cent.
APEC released its annual economic outlook on Monday.
Newfoundland and Labrador’s economy is expected to decline by 2.2 per cent this year due to a contraction in investment and continued low oil prices, the report indicates.
APEC predicts Prince Edward Island’s economy will remain Atlantic Canada’s growth leader next year due to an increase in population supporting consumer spending and new home construction. Nova Scotia and New Brunswick will continue to expand, meanwhile, but not as fast as the national pace.
Limited job growth and modest wage gains will keep growth in consumer spending in Atlantic Canada below national rates, the APEC outlook predicts, while increasing interest rates will also make households more cautious about taking on more debt to make bigger purchases.
Major project spending to fall
APEC predicts major project spending will fall across Atlantic Canada next year, with Newfoundland and Labrador’s drop the steepest by far at 19 per cent.
Fiscal restraint by all provinces in the region will continue to slow economic growth, APEC forecasts. The biggest impact will be in Newfoundland and Labrador.
“U.S. growth is expected to remain strong in 2018, supporting demand for Atlantic exports, although uncertainty regarding the outcome of the renegotiation of NAFTA may have a dampening effect,” said David Chaundy, APEC’s director of research.
“Growth in the E.U has also improved, and with most tariffs now eliminated on trade with the E.U., there should be a boost to Atlantic exports.”
Atlantic seafood exports to China and other Asian countries is up 27 per cent this year.