Canada’s economy will grow by 1.4% in 2019, according to a new report by the Conference Board of Canada. That number is down from the 1.9% growth the research firm had previously projected.
The think-tank predicts the announcements in Tuesday’s federal budget are unlikely to impact the country’s economic outlook, and said the weak growth Canada experienced at the end of 2018 will persist through the first half of 2019. But Matthew Stewart, the Conference Board’s director of economics, noted there are “reasons to be cautiously optimistic.”
“Job gains and wage growth were strong at the beginning of the year,” Stewart said in a news release. “In addition, the anticipated impact on investment from the measures contained in the federal government’s fall economic statement have yet to materialize.”
One of those measures, which will allow businesses to write off the entirety of certain capital expenditures in a single fiscal year, will make business investment more attractive in 2019, the Conference Board predicts. But it also expects investment in the oil and gas sector and the housing market to continue to decline, with oil and gas investment “set to post its fifth consecutive annual decline.”
The report also says GDP growth will be supported by exports, which are expected to increase by 2% this year in spite of a reduction in energy exports. Imports will likely remain flat, allowing the trade sector to support real GDP growth of 1.4% in 2019.
Additionally, the Conference Board expects household income to increase “substantially” as the country adds more jobs and wage growth accelerates.
The full Canadian Outlook: Spring 2019 Report is available here.