Maintaining Profits economic growth chart businessmen illustration

The Canadian economy is set to slow over the next couple of years, according to a report published Thursday from Deloitte Economic Advisory.

Real gross domestic product (GDP) growth in Canada is expected to slow to 2% this year, edge slightly lower in 2019 and fall to 1.4% by 2020, the report says.

The projected slowdown comes against the backdrop of weaker consumer spending, and a softer housing market, amid higher interest rates.

The global economy is also slowing, the report notes. global growth is expected to dip to 3.2% in 2020, from a forecast 4% in 2018.

Additionally, Canadian exports should grow “at only a moderate rate” in the year ahead, the report says, as U.S. demand softens, and market share declines in many of Canada’s major export markets.

“The signs that the North American economy is in the late stages of a business cycle are all around us, from a record long bull market in U.S. equities to low unemployment rates and rising central bank rates,” says Craig Alexander, chief economist at Deloitte Canada, in a statement.

While the easing of trade tensions with the U.S. removes some of the downside risk to the outlook, “businesses should still prepare for more moderate domestic demand growth and a weaker U.S. economy over the medium term,” Alexander says.

In the face of the dim forecast, “Canada needs to boost the economy’s potential to sustain stronger growth over the long- run,” the report says.

“This is ultimately about improving [Canada’s] competitiveness, productivity and innovation,” it says. “It also includes unlocking the potential of the Canadian labour force, particularly under-represented groups such as women, immigrants, Indigenous people and people with disabilities.”