Canada’s economy is chugging along despite trade uncertainty, according to the RBC Economic Outlook quarterly report released today. Consumer spending and business sentiment remain high, and there are signs of a modest firming in wage gains.
RBC projects real GDP growth of 2.1% in 2018, slowing slightly to 2.0% in 2019.
Canada’s economic performance was uneven over the first half of 2018, with a mild gain of 1.4% in the first quarter followed by an outsized 2.9% rise in the second quarter. RBC expects the second half will be much the same.
“We expect the shutdown of a major oil sands producer in July to weigh on the quarter’s performance, while we should see a rebound in Q4 as production recovers,” said Craig Wright, senior VP and chief economist at RBC.
The report cites tight labor markets limiting growth in British Columbia, Ontario and Quebec. Eighty-six percent of local economic regions in Ontario boast a jobless rate of 6% or less. In British Columbia, the unemployment rate is forecast to be just 4.9%.
RBC Economics believes the tight labor conditions are contributing to a slow-down of economic growth in several provinces, most especially in BC, where one in every 24 jobs, or 4.2%, remains unfilled.