{"id":383853,"date":"2020-11-18T08:03:18","date_gmt":"2020-11-18T13:03:18","guid":{"rendered":"http:\/\/www.marketnewsdesk.com\/?p=383853"},"modified":"2020-11-18T08:03:18","modified_gmt":"2020-11-18T13:03:18","slug":"a-slowing-economic-recovery-the-conference-board-of-canada-releases-its-provincial-economic-outlook","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/a-slowing-economic-recovery-the-conference-board-of-canada-releases-its-provincial-economic-outlook\/","title":{"rendered":"A slowing economic recovery \u2013 The Conference Board of Canada releases its Provincial Economic Outlook"},"content":{"rendered":"
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OTTAWA, Nov. 18, 2020 (GLOBE NEWSWIRE) — In its latest Provincial Economic Outlook<\/a>, The Conference Board of Canada forecasts that localized closures and a retrenchment in household spending and business activity will hold back the pace of economic recovery into mid-2021.<\/p>\n

For most Canadian provinces, economic activity is not expected to return to pre-COVID-19 levels until the second half of 2021. However, the economic outlook for Canada\u2019s provinces differs because of the varying effects of the pandemic on different industries across the country. Meanwhile, federal and provincial governments will record massive deficits this year that will likely result in weak public spending growth once the pandemic is behind us.<\/p>\n

\u201cWe expect global real GDP to decline by 4.7 per cent this year,\u201d says Pedro Antunes, Chief Economist at The Conference Board of Canada. \u201cThe Global economy partly recovered in the third quarter, but a second wave of the virus, and a delay in additional stimulus measures in the United States, will hamper the recovery in the fourth quarter.\u201d<\/p>\n

Looking ahead, The Conference Board of Canada forecasts that Canada\u2019s pace of economic recovery will flatten, if not stall. While economic activity is fully restored in some sectors, many will not see a return to normal until a vaccine is available to the public, both in Canada and globally. And for some industries, difficulties will persist for the foreseeable future.<\/p>\n

Moreover, the arrival of colder weather, coupled with a steep rise in the number of COVID-19 cases in many provinces, is expected to disrupt the economy\u2019s recovery. The health measures and testing currently in place should prevent another full shutdown of economic activity, but localized and regional shutdowns are likely to continue and weaken the pace of Canada\u2019s recovery.<\/p>\n

Extraordinary monetary and fiscal measures have supported businesses and household income, especially that of households. In fact, despite the loss of jobs, The Conference Board of Canada is calling for aggregate household real disposable income to post a record gain in 2020, up more than 9 per cent. Consumer spending should accelerate in 2021 as employment more fully recovers and the health risks associated with COVID-19 dissipate.<\/p>\n

The tumultuous economic environment, both in Canada and globally, provides little incentive for new business investment. Real business investment is forecast to contract by nearly 11 per cent this year, a prospect that bodes poorly for adding to Canada\u2019s productive capacity. Next year, business investment is expected to recover modestly. The incoming change of government in the United States is expected to settle trade uncertainty and access to the U.S. market, a situation that could help rekindle investment in Canadian automotive and other manufacturing.<\/p>\n

Among Canada\u2019s provinces, economic recoveries are underway. But the path back to normal will vary by industry and by province. Looking ahead to 2021, Canada\u2019s overall, real GDP is forecast to shrink by 6.6 per cent in 2020. Solid gains in 2021 (up 5.6 per cent) and 2022 (3.4 per cent) will not be enough to bring Canada\u2019s economy back to full potential. The situation suggests that labour markets will rebalance slowly, with the unemployment rate remaining above 2019 levels through to the end of 2023.<\/p>\n

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