Canada set for mixed economic growth patterns in 2024: report

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Conversely, the Atlantic provinces, buoyed by robust population growth, are likely to perform comparatively better. Towards year-end, provinces reliant on commodities should benefit from rising prices and global demand, thanks to anticipated interest rate cuts.

While Canada’s GDP forecasts suggest provinces may avoid recession, per capita performance will be lacklustre. CIBC’s momentum indicator suggests a bleak economic landscape, with activity falling below historical trends, especially evident in Quebec’s sharp deceleration.

Factors such as droughts and wildfires dampened Prairie provinces’ economic activity, while BC and Ontario grappled with housing market constraints and supply chain disruptions. Despite recent improvements, 2023’s lows in economic momentum remained less dire than those of the 2008/09 recession.

Impact of rate adjustments

CIBC notes inflation concerns loom large, especially in Quebec, where elevated inflation rates outpace those of other provinces. Reduced immigration exacerbates labour market tightness, driving up wages and prices. Amidst tightening labour markets, Quebec’s investment in machinery and equipment may offer non-inflationary growth opportunities.

Similarly, British Columbia and Ontario face dwindling demand due to exhausted savings and increased business bankruptcies, fuelled by increased mortgage rates. The report notes that although mortgage arrears in BC and Ontario are similar to 2019 levels, regulatory safeguards mitigate risks.

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