Alberta continues to beat out the rest of Canada with its impressive rate of economic growth, but there’s a surprising new province that’s picking up speed.
Nova Scotia is poised for a big comeback in the months ahead, outpacing almost all of its fellow provinces across Canada, according to the latest forecast from the Conference Board of Canada.
“The tide is finally turning for Nova Scotia,” says the Conference Board’s Spring Outlook.
After struggling for the last three years, it predicts Nova Scotia's economy will expand by 2.3 per cent this year, the strongest outlook outside Western Canada.
The growth increases to 2.5 per cent in 2015, fuelled by natural gas production and shipbuilding.
Nova Scotia’s anticipated growth rate this year is behind Alberta, which is expected to grow at 3.5 per cent, and tied with British Columbia. It’s also ahead of overall economic growth expected for Canada, which the Conference Board forecasts will be 2.1 per cent.
It’s at least the second time in a year that Nova Scotia has been singled out for its economic potential. A report last year cited Canada’s second-smallest province as the “best performing region in North America” for attracting foreign investment.
The report from fDi Intelligence, a division of The Financial Times, said Nova Scotia attracted more FDI projects per capita in 2012 than any other state or province. It noted that three of the four largest job-creating FDI projects across Canada went to Nova Scotia in 2012 with major investments by IBM, Admiral Insurance, and Stream.
Boom times, but not for labour market
The Conference Board says Nova Scotia’s economy will get a boost from increased natural gas production from the new Deep Panuke offshore natural gas field, which began flowing last year.
While that will increase spending in the province, it won’t be a big job generator, the report notes.
“The job market remains in a depressed state,” the report says. “The real recovery in the job market will occur only in 2015 when the province enjoys more balanced growth in several key sectors.”
Shipbuilding will help to create more jobs in Nova Scotia in 2015, when work starts on the multi-decade, $25-billion contract to build combat ships for the navy.
“This massive project, along with continued improvements in the U.S. economy, will bolster manufacturing in the province and help lift overall real GDP by a further 2.5 per cent in 2015,” the Conference Board says.
Still, the unemployment rate in the province is expected to remain stubbornly high.
The Conference Board sees Nova Scotia’s unemployment rate rising from 8.9 per cent in May this year to an average of 8.6 per cent in 2015.
“That will still leave the rate 1 percentage point higher than it was in 2008,” it notes.
Nova Scotians are taking action to change the province’s depressing employment picture. A group of government, business and labour leaders, called the oneNS Coalition, was recently formed to try to figure out how to sustain growth in the province, looking at both economic and population challenges. It promises to deliver a 10-year plan by the end of next year.
The Conference Board’s forecast for Nova Scotia is a bit rosier than a recent one released by the Royal Bank.
RBC is forecasting the province’s GDP will grow 2.2 per cent this year and next, after only advancing 1 per cent in 2013.
In a report called “Clearer skies ahead for Canada’s ocean playground,” economist Laura Cooper also points to natural gas exploration, including work from energy giants BP and Shell, as “a key driver of growth beyond 2014.”
Chinese demand for seafood products and demand for rubber tires in the U.S. have also added to the province’s international merchandise exports. Cooper also points to investment being made to build the $500 million Halifax convention centre and the development of a 28 MW wind farm as economic boosters in the province.