Canadian economic forecast
Canadian Outlook Economic Forecast
This quarterly economic forecast presents the short-term national outlook.
- The Canadian economy is projected to grow by just 1.4 per cent in 2019.
- Despite the slow growth, the economy is expected to post one of its strongest job gains on record this year, while tight labour markets are resulting in strong wage growth.
- Consumer spending will post another solid increase this year despite ongoing concerns about the elevated level of household debt.
- The housing market will continue to cool this year, with a decline in residential investment and prices.
- The outlook for business investment is weak. Businesses are expressing a great deal of pessimism about their future spending.
- Canada’s merchandise exports are expected to see no growth this year, held back by weakness in the energy sector and increased protectionism abroad.
Canadian Outlook Long-Term Economic Forecast
This annual economic forecast presents the long-term national outlook. The U.S. economic outlook is presented in a separate section.
- The Canadian economy is projected to grow by 2 per cent in 2018 and 2019. However, growth is expected to slow to below 2 per cent beginning in 2020.
- The economy has been driven by robust household spending in recent years. This has been spurred in part by high home prices and a large increase in consumer debt.
- Over the next few years, employment growth will be constrained by slow labour force growth and low unemployment. This will combine with high household debt and rising interest rates to temper real consumer spending.
- Non-residential business investment has not yet recovered from its decline following the commodities price crash of 2014. The current weakness is largely the result of low investment in mining.
- Business investment is expected to post solid growth as the new US–Mexico–Canada trade deal lowers uncertainty and businesses respond to high levels of capacity utilization.
- The economy has operated below full capacity over the last several years. However, it is projected to reach full capacity in 2020. After that, economic growth will be limited to an average of 1.7 or 1.8 per cent.