British Columbia and Ontario are forecast to grow 2.8 per cent and 2.4 per cent respectively, while Alberta will continue to struggle, according to a report by CIBC World Markets.
“Given the crash in oil prices and the resulting deep dive in energy sector capital spending, it’s really no surprise to see recent economic indicators verifying that the changing of the guard in Canadian growth is well underway,” notes Avery Shenfeld, chief economist at CIBC World Markets and co-authors and CIBC economics Nick Exarhos and Andrew Granthan, in their report, released November 23, 2015.
According to Shenfeld in an online Radio Canada International article, manufacturing is expected to rebound, noting that the weaker Canadian dollar should “buttress manufacturing output, with Ontario and Quebec being the main beneficiaries.
He says CIBC has seen “some signs that manufacturers that are in the most currency-sensitive parts of the manufacturing industry are doing a bit better,” but notes that Canadian manufacturers that are suppliers to the US comapnies may be negatively affected as a strong US dollar “is actually making the US less competitive globally.”
The CICB World Markets report notes that much of the downshift in national GDP is a result of a decline in capital spending in mining, oil and gas in the past year. However, the report notes that “with energy activity starting from a lower level already, while it will continue to weigh on Alberta, Saskatchewan and Newfoundland & Labrador, it will do less damage to the national GDP growth rate.”