Halifax economy set for smooth sailing in 2015

Halifax joins Toronto and Vancouver as one of the fastest growing metropolitan economies this year. Halifax’s economy is forecast to expand by 3.1 per cent in 2015 and 2.8 per cent next year, according to The Conference Board of Canada’s Metropolitan Outlook: Spring 2015.

“For the first time since 2009, Halifax will have one of the fastest growing metropolitan economies among the 13 cities covered in this report.Halifax is seeing growth in a variety of sectors, but activity in manufacturing is expected to be particularly strong, as production begins at the Halifax Shipyard on the first set of new vessels for the Royal Canadian Navy,” said Alan Arcand, Associate Director, Centre for Municipal Studies.

Halifax’s non-residential construction has been busy in recent years with several projects, including the $300 million expansion of the Halifax Shipyard, new buildings and renovations at Dalhousie University and a new Halifax Public Library. The residential construction market is expected to pick up in 2015 after housing starts fell in each of the past three years. Total housing starts are expected to rise by 2 per cent this year.

All in all, construction output is set to increase by 9.8 percent in 2015, a welcome change from the 10.6 per cent decline in 2014.

Halifax’s manufacturing sector is expected to see output increase by a vigorous 8.6 per cent this year, following declines totalling more than 12 per cent through 2013-2014. Work at the Halifax Shipyard will ramp up this year as Irving Shipbuilding starts building Arctic patrol ships as part of a $26 billion multi-year contract for the Royal Canadian Navy.

The outlook is not as rosy for the area’s resources, agriculture and utilities sector, as natural declines at the Deep Panuke and Sable Island offshore wells will lead to slight drops in output over the next two years. However, there is upside potential for future developments, thanks to the $2 billion Shell and BP are spending in offshore exploration over the next few years.

Hit hard by the slump in oil prices, the economies of Calgary and Edmonton are expected to shrink by 1.2 per cent and 0.8 per cent respectively, while economic growth will cool considerably in Regina and Saskatoon. Aside from these four metropolitan areas, most of the other 13 CMAs covered in the report will see their economic fortunes improve this year, boosted by the lower prices for oil, as well as a weaker Canadian dollar and improvement in the U.S. economy.