As economists scramble to rejig their economic forecasts in the wake of the oil price plunge, Toronto-Dominion Bank is the latest to calculate Canada’s “changing of the guard.”
Ontario is now projected to lead the provinces in average economic growth over the next two years, with British Columbia and Alberta just behind.
“Oil-rich provinces have recorded the sharpest downgrades in their respective outlooks,” economists Craig Alexander, Derek Burleton and Jonathan Bendiner said in today’s report.
“On the flip side, the outlook is more upbeat for most non-resource based economies,” they added.
“Solid economic growth from the U.S., another downward leg in the loonie and lower energy costs should provide a lift to manufacturing-based economies … This marks a changing of the guard, as Alberta has recorded a sizeable growth advantage over the rest of the country in recent years.”
TD now forecasts that economic growth in 2015 and 2016 will average 2.5 per cent in Ontario, 2.4 per cent in British Columbia and 2.3 per cent in Alberta.
TD cut its forecasts for the oil provinces of Alberta, Saskatchewan and Newfoundland and Labrador.
“It will not likely be long before the income shock from the recent plunge in oil prices will filter through to the labour markets in the affected regions,” the TD economists warned.
via Globe and Mail