Economic growth slow in face of trade uncertainty, aging population
Economy is expected to expand by only 0.6 per cent in 2019
The New Brunswick economy is expected to expand by only 0.6 per cent in 2019, as growth forecasters lower their expectations nationally and internationally.
Growth in New Brunswick's aquaculture, forestry and energy sectors is expected to be hampered by labour shortages, the softwood lumber dispute and repairs to the Saint John oil refinery after the explosion last October.
On the employment front, no growth is forecast.
The economic outlook released by the province said the aging population will also hinder economic growth in 2019 as the youngest baby boomers hit 55. New Brunswick has one of the highest proportions in Canada of people in the 55-plus age group, at 36.8 per cent.
In his budget speech, Finance Minister Ernie Steeves said the province cannot rely on additional tax increases to solve the strain this demographic shift will put on services.
"Our demographics will challenge economic and revenue growth potential and increase demand for services such as health care," Steeves said.
Trade uncertainty and weaker growth from New Brunswick's international and domestic trading partners also mean any future economic growth will be slow, he said.
Despite the signing of CUSMA, the new trade agreement with the U.S. and Mexico, investment and exports will likely be limited until each country ratifies and implements the deal.
For 2018, the Department of Finance has estimated real economic growth of 0.9 per cent.
Manufacturing sales, housing starts and trade showed gains at the beginning of the year, but a slowdown was observed by the fourth quarter. However, income, investment in non-residential building construction and population showed stronger than expected growth.
Employment grew by 0.3 per cent in 2018, the second consecutive year growth has been registered. No employment growth is expected for 2019, but Treasury Board anticipates household income growth of two per cent.
Steeves said as the government continues to work toward reducing the net debt and limiting spending, it is committed to boosting the economy over time by lowering taxes.