Atlantic economic growth is expected to weaken in 2024  
…but is still outperforming Canada 

FOR IMMEDIATE RELEASE 

Halifax (October 31, 2023) – Atlantic Canada’s economic growth is set to weaken in 2024 but outpace Canada next year due to sustained in-migration, according to the Atlantic Economic Council’s annual Atlantic Economic Outlook, released today. We forecast the Maritime provinces will grow by 1.1% in 2024, down from 1.8% in 2023. Newfoundland and Labrador’s real GDP growth will improve next year, growing by 3.2%, due to higher oil output. 

Economic activity in our region is weakening as the full impact of the central bank’s rate hikes take effect. We forecast that average inflation for our region will dip from 3.6% to 2.5% in 2024 as restrictive monetary policy works its way through the economy. Atlantic job growth will drop from 2.6% this year to 1% next year as businesses scale back hiring and investment due to high interest rates. 

Atlantic Canadians’ relatively low household debt ratios offer a buffer for households dealing with mortgage renewals during high interest rates.  

“Mortgage renewals at higher rates will limit some consumer spending, but not to the degree as elsewhere in Canada.” says Senior Policy Analyst, Fred Bergman.  

With the economy weakening and more people moving to the region, labour shortages have declined. Job vacancies are down 20,000 from May 2022 to July 2023. We project the increase in population to outpace job growth next year, creating upward pressure on the unemployment rate. While there are fewer job vacancies, we still need to attract and retain new residents to replace the growing number of retirees.  

“We expect the median age in our region will gradually fall over the coming years, if younger individuals continue to move and work here,” says Bergman. “This is going to require addressing major challenges – having enough schools, healthcare workers, and notably housing.”  

Atlantic Canada’s population continues to grow at record levels thanks to strong in-migration. Our population is up 2.8% or 72,000 people from July 1, 2022, to July 1, 2023. High interest rates, labour shortages, and rising construction costs have been restraining construction activity. 

“New housing construction has not kept pace with the spike in population growth,” says Bergman. “We estimate that 51,000 new housing units were needed to support population growth over the last two years. Only 25,000 units were started in the region during this time frame.”  

Recent government initiatives including rebating the HST on new rental construction projects and greater investments in affordable housing will help . But the biggest barrier to building more homes is labour shortages in construction occupations. They are well above most other industries.  

Newfoundland & Labrador

Non-oil economy slowing in 2024 as high interest rates stifle growth. 

• Real GDP is forecast to fall 2.6% in 2023 due to lower oil production.  
  
• A rebound in oil production will support economic growth of 3.2% in 2024, but the rest of the economy will slow.  
• Major project spending will drop 10% to $5.3 billion in 2024.  
  

Prince Edward Island

Strong population growth insulates the Island from a greater slowdown. 

• Real GDP growth will slow to 1.4% in 2024 from 2.7% this year.  
  
• An increase in residential construction is expected next year to support a growing population. 
  
• Exports will be negatively impacted by an economic slowdown in some of the Island’s biggest trading partners.
  

Nova Scotia

Economic growth easing despite population boost. 

• Nova Scotia’s real GDP will grow by 1.1% in 2024 following 1.5% growth in 2023.  
  
• Population is up 3.2% year-over-year in July. 
  
• Nova Scotia is expected to lead the region in major projects investment growth next year.  

New Brunswick

Higher oil and lumber prices will support economic growth. 

• We expect a 1.9% increase in New Brunswick’s real GDP this year. This will slow to 1% in 2024. 
  
• New Brunswick’s population has grown at a record pace of over 3% from July 2022 to July 2023. 
  
• Total exports are expected to expand in 2024, despite a cooling global economy, as oil and lumber prices are forecast to increase. 

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