Provincial outlook weaker: TD

TD Bank (TSX:TD) has lowered its estimates for economic growth this year in most of Canada’s provinces — saying the United States, Europe and Asia are weaker than expected and households are more cautious than before.

TORONTO — TD Bank (TSX:TD) has lowered its estimates for economic growth this year in most of Canada’s provinces — saying the United States, Europe and Asia are weaker than expected and households are more cautious than before.

It says Alberta and Saskatchewan will continue to lead the other provinces in economic growth this year, but the pace will fall below three per cent. In the other eight provinces, TD is estimating 2012 growth will be less than two per cent.

In most provinces, the new TD estimate is below the outlook it issued in July, with the exception of Manitoba and Prince Edward Island.

“In Europe, while a dramatic escalation in the financial crisis has been avoided and mechanisms aimed at preventing such an outcome have been agreed upon, risk levels remain high,” the report says.

It adds that the U.S. economy has been recovering at a “disappointing pace” and exports to Canada’s largest foreign customer have been constrained by the high value of Canada’s dollar relative to the U.S. currency.

“Moreover, China’s soft landing and the maturation of growth in many emerging market countries have set limits to what had appeared to be almost boundless demand — a development that has not been lost on commodity markets.”

In Canada, TD notes the federal and provincial governments have launched extensive efforts to restrain their spending and home prices has begun to come down in after years of rapid growth in some markets. It suggested Canadian households across the country — particularly in Ontario — are being more cautious than previously expected.

For most provinces, TD is forecasting stronger growth in 2013 than this year and further improvement in 2014.

Newfoundland’s growth in 2013, bolstered by its oil and gas resources, is projected to be 2.3 per cent followed by 2.5 per cent in 2014. The growth in the other three energy-rich provinces — Alberta, Saskatchewan and British Columbia — is estimated at 3.1 per cent, 3.0 per cent and 1.9 per cent respectively.

“Construction of commercial properties (in Ontario) is brimming and the housing market has maintained its upward path despite signs of some overvaluation in its major markets, especially in the Greater Toronto Area.”

“At the same time, however, households have shown increased caution, as evidenced by weakening retail sales gains and a reduction in the pace of debt accumulation.”

The report says housing markets will face different outlooks depending on the region, with the Prairies likely to be “largely unscathed” and the major markets in Toronto, Montreal and Vancouver to show declines.

“The varying residential market conditions will exacerbate growth differentials given that housing is a large driver of consumer spending,” the report says.

TD adds that its forecasts for 2013 and 2014 are looking more positive, although it expects growth will continue to be modest.

The revised forecast calls for Saskatchewan to have the fastest economic growth of any province, with an increase of 2.9 per cent over last year. Alberta is in the No. 2 spot at 2.8 per cent projected growth this year.

Newfoundland and Labrador is at the other end of the spectrum, with its growth falling dramatically from 2.8 per cent last year to 0.9 per cent in 2012 — the lowest among the 10 provinces.

Ontario, Quebec and British Columbia — the three most populous provinces — are now projected to have 2012 growth of 1.9 per cent, 1.5 per cent and 1.7 per cent respectively.

Manitoba’s growth is projected to be 1.9 per cent — matching Ontario’s — while P.E.I. will lead the Atlantic provinces at 1.8 per cent, followed by Nova Scotia (1.3 per cent) and New Brunswick (1.0 per cent) and Newfoundland (0.9 per cent).

Ontario is one of only two provinces that’s expected to see slower economic growth next year, falling to 1.8 per cent from 1.9 per cent. The other laggard is expected to be P.E.I., with 1.4 per cent growth down from 1.8 per cent.

The projected 2013 growth rates for the other provinces are: Nova Scotia, 2.0 per cent; New Brunswick, 1.4 per cent, Quebec, 1.7 per cent; Manitoba, 2.1 per cent.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Only 13 new COVID-19 cases confirmed by Alberta gov’t Saturday

There’s currently only two active cases in province’s central zone

Food Truck Fridays to start new Drive and Dash events next week

Events will be held in Westerner Park parking lot Thursday evenings, Friday afternoons all June

Alberta gov’t to expand mental health supports

The Government of Alberta says a $21.6-million investment will expand online resources… Continue reading

City of Red Deer encouraged residents to participate in Food Bank Ninja Challenge

The City of Red Deer is encouraging residents to participate in a… Continue reading

READER VIDEO: American White Pelicans spotted in Red Deer River

A Red Deer Advocate reader spotted a group of American White Pelicans… Continue reading

Protesters rally in Toronto against anti-black, Indigenous racism

TORONTO — Thousands of people are taking part in a rally on… Continue reading

Another COVID-19 case reported in northern New Brunswick on Saturday

CAMPBELLTON, N.B. — People from a city in northern New Brunswick lined… Continue reading

B.C. sees second day in a row with no COVID-19 deaths as schools ready to reopen

VICTORIA — British Columbia announced no new deaths from COVID-19 for the… Continue reading

UN sets pandemic voting rules for Canada’s Security Council campaign

OTTAWA — The United Nations has confirmed that the election for non-permanent… Continue reading

Police watchdog investigating death of Richmond man

RICHMOND, B.C. — British Columbia’s police watchdog has been called in to… Continue reading

COVID-19 cancelled their wedding plans, so they married on a B.C. mountaintop

Ceremony was live streamed to friends and family around the world

Tooting the importance of whistling

OK, so someone who tattles on another person is a whistleblower, and… Continue reading

Police see increase in speedy drivers on quieter streets during pandemic

Police across the country say they’ve been dealing with more complaints about loud, fast vehicles

Most Read