Nova Scotia’s Economic Outlook

Fishing has been an important industry in Nova Scotia for generations, but the industry took a major hit in the early 1990s, when the federal government temporarily halted cod fishing due to declining fish population. Coal, oil, gas, gypsum, salt, silica, peat, and barite mining are other natural resources that contribute to the local economy. Main agriculture products, include grains, livestock, and fruit. Forestry products such as wood pulp and paper.

Major industries in Nova Scotia, include defence and aerospace, information and communication technology, steel mills, and manufacturing. Tourism is also important, although it has seen struggles over the past several years, as the industry includes thousands of local businesses who focus on lodging and experiencing local culture. Cruise ships bring thousands to the province each year.

Nova Scotia’s economy ended 2018 on solid footing with 1.2% growth, just shy of the 1.5% advance in 2017.Real GDP is expected to expand by 1.8 per cent this year and into 2020.

Demographic gains are translating into long-awaited labour force growth over the next two years. Household consumption was projected to advance by 3.1 per cent in 2019, thanks to improving employment conditions and healthy wage gains.

 

HOT HOUSING MARKET

The residential construction spending side which grew 11% in the first quarter. The housing market is quite hot, particularly in Halifax. Stronger home building should serve to alleviate some of the housing related supply constraints, since all of the growth was in multi-unit dwellings.

 

With low inventory of housing to buy across the province, 2019 was a Seller’s market and saw home sale prices increase from 10-20% depending on location. Halifax was the hottest market with only 5 months-worth of inventory and many properties receiving multiple offers will final sales over the asking price. Lack of inventory sent buyers further away from the preferred one-hour distance from Halifax. This saw typically slow market and lower priced areas such as Annapolis Royal and Liverpool, experience booms. Trying to find properties in highly desirable areas such as Wolfville and Chester were virtually impossible to find or had accepted offers before they hit MLS.

 

IMMIGRATION IS KEY

An inflow of international and interprovincial immigrants provided solid underpinnings. Population growth reached a 34-year high. This, along with a strong job market, boosted housing demand. 2019 will retain some of that momentum seen in the last few years. Immigration is critical to Nova Scotia’s future growth and success and the Nova Scotia government has prioritized programs that  focus on attracting immigrants who are ready, willing and able to work where they are needed most.

 

The provincial government continues to focus its efforts on achieving fiscal sustainability and balanced budget.

Non-residential investment is forecast to increase sharply due to the expected start of construction on the Goldboro Liquefied Natural Gas Project in the fall of 2020.

 

DIVERSIFYING EXPORTS

Exports are will fare better next year than in 2019 with expected growth of 2.8 per cent in 2020.

Most of the province’s economic growth this year is attributed to advances in the services sectors.

There was also strength in the external side of the economy in Q1 2019 with exports growing 6.4%.

This was led by sales of consumer goods and farm, fishing and intermediate food products. Amidst trade tensions, Nova Scotia has made efforts to diversify its export partners by launching the Nova Scotia-Europe Engagement Strategy. Exports to China also grew 31.5% in 2018 to reach a new high, led by seafood exports.