The Atlantic Provinces Economic Council is forecasting limited economic growth for the region next year and warning of small gains in consumer spending and employment.

In its annual economic outlook, the Halifax-based think-tank says it also expects to see a slowing housing market and a drop in government spending in 2012.

The report says Newfoundland and Labrador is expected to experience the most GDP growth this year — 4.2% — thanks to a spurt in mining production and capital investment.

However, growth is expected to slow to 1.1% next year in that province as lower oil output is expected to offset those gains.

The report says growth is expected to soften in 2012 in Prince Edward Island and New Brunswick, at 1.2% and 1.3% respectively.

Nova Scotia can expect growth of about 1.2% in 2012, up from one per cent this year, assuming the shuttered NewPage Port Hawkesbury paper mill remains closed.

The forecast for Nova Scotia also takes into account the major shipbuilding contract recently awarded to the Halifax Shipyard.

The report notes the outlook for exports in the Atlantic region is mixed as the region’s exports change and global demand increases.