The Atlantic economy is expanding in early 2024 despite continued high interest rates and elevated inflation.
HALIFAX (June 12, 2024) – Atlantic Canada is leading the country on many economic indicators so far this year, according to the Atlantic Economic Council’s assessment in our latestAtlantic Economic Update. Population gains are supporting strong job growth and driving new home construction, despite the dampening effects of high interest rates.
“The Atlantic provinces are showing resilience in the face of economic pressures,” said Fred Bergman, Senior Policy Analyst. “While high interest rates and higher prices still pose challenges, the growth in labour income and housing starts are a positive sign for the region's economy.”
The region’s significant economic growth in early 2024 is demonstrated by the 7.5% increase in wages and salaries and retail sales growth that is more than three times as fast as the national rate. A 3% rise in population across the Atlantic provinces is underpinning this activity.
“Rapid growth and weakening affordability have created challenges across the Atlantic region,” added Bergman. “The Atlantic provinces need careful strategic planning and infrastructure investment to sustain growth.”
The region is expected to experience a moderation in growth later this year due to impending shifts in immigration policies and a slowdown in population gains. However, affordability pressures should start to ease as interest rates decline and price growth continues to slow.
Highlights
- Housing starts: Atlantic Canada saw a remarkable 150% increase in housing starts in the first quarter of 2024 compared to the same period in 2023. This surge is partially attributed to the elimination of federal and provincial sales taxes on new rental construction.
- Labor market: Employment in the region grew by 3.6% year-to-date in May 2024, with real weekly wages increasing by over 2%.
- Inflation: Inflation rates are moving towards the central bank’s target of 2%, and retail volumes have risen nearly 2% year-over-year in the first quarter of 2024, despite a decline in per capita purchases due to continued high inflation and interest rates.
Provincial Highlights
Newfoundland & Labrador:
- Employment & housing: Employment grew by 3.4% in the first five months of 2024, and housing starts increased by over 115% compared to the same period in 2023.
- Industries: The hydrogen and oil industries are set to drive significant capital investments, with notable projects like the $6 billion Project Nujio’qonik progressing.
Prince Edward Island:
- Economic growth: The province’s economy expanded, with employment increasing by nearly 6% year-to-date in May 2024. Housing starts also reached a record high, with the province on track to achieve its target of 2,000 new homes in 2024.
- Exports: Export growth was driven by manufacturing and bioscience, despite a decline in seafood exports.
Nova Scotia:
- Employment:Employment grew at the second fastest rate in Canada.
- Housing: The province saw record high housing starts, with a significant focus on apartment construction.
New Brunswick:
- Population & housing: The population grew by over 3%, with urban housing starts more than doubling in 2024Q1 compared to the previous year.
- Investment: The province is benefiting from a major $1.1 billion investment in the Saint John mill, which is expected to significantly boost economic activity.
To receive a copy of this publication or schedule an interview, please contact:
Erica Parrill
Communications Manager
Email: erica@atlanticeconomiccouncil.ca
Mobile: 902-536-3616
