Newfoundland and Labrador, Alberta and Manitoba will lead all Canadian provinces in economic growth in 2015, while Ontario will bounce back after years of trailing behind the rest of the country.
"We are finally seeing signs that lagging provincial economies are performing better and this momentum is expected to continue in 2015," said Marie-Christine Bernard, Provincial and Territorial Forecast with the Conference Board of Canada (CBOC) associate director.
"With Newfoundland and Labrador, Alberta and Manitoba leading the way, most of the provinces are heading in the right direction. Next, attention to balancing provincial budgets will still be required."
A recent report by the CBOC predicts the Canadian economy will post real Gross Domestic Product (GDP) growth of 2.6 per cent in 2015, which is up from a more modest increase of 2.4 per cent in 2014.
The main factor behind the growth is the strength in exports and the stronger U.S. economy, which is raising demand for many industrial goods.
Newfoundland and Labrador will lead the country in economic growth with real GDP forecast to expand by 3.4 per cent in 2015.
The report forecasts that real GDP will decline by 1.3 per cent in 2014, as a result of the provincial economy struggling with steep job losses and lower oil production.
The Terra Nova and North Amethyst fields are expected to drive economic growth in 2015 as they return to normal production levels, after maintenance and technical difficulties constrained operations during the summer.
The Long Harbour hydromet facility, which produces nickel, copper and cobalt ores from the Voisey Bay mine, will add to the provinces manufacturing capacity over the next two years.
However, the positive economic outlook in 2015 is not expected to last into 2016, due to declining production from maturing oil fields.
In addition, real construction output is expected to drop steeply in 2016, because most of the major construction projects will be past their peak investment stage.
The Alberta economy is expected to expand by 3.3 per cent in 2015, despite falling crude oil prices and weak global demand.
Oil producers will push ahead to complete projects that have already started, while increased crude production will drive exports.
Megaprojects will continue to generate huge opportunities for job seekers and continue to serve as a magnet for immigrants into the province.
Alberta’s economy will expand by 4.4 per cent in 2014, as a result of the strong population and job growth, along with increased industrial production.
Manitoba’s economy is forecast to grow by 2.3 per cent in 2014, accelerating to three per cent in 2015, propelled by increased construction and metal mining.
The construction industry is forecast to expand by 11.6 per cent in 2015 and 6.6 per cent in 2016.
Investment in energy projects will support gains in private sector non-residential construction over the next two years.
The Bipole III Transmission Reliability Project is expected to break ground in 2015 and the provincial government will continue to invest heavily in infrastructure.
Residential investment will also post strong gains, as fairly strong population growth is stimulating the demand for housing.
Ontario’s domestic economy was constrained by the harsh winter in the early part of 2014, as construction was halted and consumers stayed indoors. However, the economy quickly bounced back in the second quarter and real GDP will grow by 1.8 per cent in 2014.
This growth was stimulated by strong demand from a resurgent U.S. economy and resilient Ontario consumers.
The competitiveness of domestic producers has improved as oil and other commodity prices continue to decline and the Canadian dollar depreciates against the U.S. dollar.
Exporters have also begun to reap the benefits of a much stronger U.S. economy, which grew at a rate of about 4 per cent in the third quarter of 2014.
Exports to other countries are expected to post strong growth of 2.6 per cent and 6.6 per cent in 2014 and 2015 respectively.
Economic growth is expected to accelerate to 2.6 per cent as business investment finally ends its two-year slump and posts solid growth in 2015.