Economic Update 2018 Prince edward island - Government of Prince Edward Island
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Prince Edward Island Economic Update 2018
As of July 1, 2018, Prince Edward Is-
land’s population is estimated to be
153,244, an increase of 1.8 per cent
over 2017, and tied for the fastest
growth amongst provinces.
Highlights of the Prince
Edward Island Economy
Total labour income on the Island,
through the second quarter of 2018,
grew by 4.1 per cent on a year-to-
date basis, tied with New Brunswick
for the fastest growth in the region.
Employment on Prince Edward
Island averaged 75,900 on a year-to-
date basis through October, an in-
crease of 3.1 per cent from the same
period in 2017, and the strongest
performance amongst provinces.
On a year-to-date basis through
September, consumer prices have
increased by 2.5 per cent.
On a year-to-date basis through September, the value of
manufacturing shipments has increased 6.6 per cent.
On a seasonally adjusted basis
through July retail sales have ad-
vanced 4.5 per cent, the fastest
growth amongst provinces. Through the first three quarters of Information from the department of
2018, housing starts have increased Economic Development and Tourism
3.6 per cent compared to the same indicates that total overnight stays
period last year. on the Island will likely exceed the
The volume of new motor vehicle
one million mark for the second year
sales has decreased 8.8 per cent on a
in a row.
year-to-date basis through Septem-
ber, while the value of new motor On a year-to-date basis through
vehicles sold has declined by 6.8 per September, international exports are
cent. up 1.1 per cent. The average of private sector fore-
casts for real GDP for the Island in
2018 is 2.1 per cent.
2 | Prince Edward Island Economic Update 2018
Introduction
The Island economy has expanded
every year since 2008, the only
jurisdiction in Canada to do so
Notable increases over this
time period were recorded in
construction, up 19.2 per cent,
manufacturing, up 5.6 per cent, and
real estate, rental and leasing, up 2.9
per cent.
The following document is an up- a detailed discussion of the Island’s
date to the economic situation of economic indicators, including the
the Province of Prince Edward Island labour force, exports, consumer pric-
since the release of the 2018 Budget. es, primary industries, population
This release begins with a discussion and construction. All information in
of the international and national this document is current to Novem-
economic context, and follows with ber 19, 2018.
Highlights of the Prince Edward Island Economy | 3
International and National
Economic Context
Growth is steady amongst the emerging market and developing economies,
though risks have risen in some economies due to a variety of factors including
tightening financial conditions, higher oil prices and geopolitical uncertainty.
The international economy is steadily expanding. Accord-
ing to the International Monetary Fund (IMF), global real
gross domestic product (GDP) is projected to expand by
3.7 per cent in 2018, with growth in advanced economies
expanding by 2.4 per cent and growth in emerging market
economies expanding by 4.7 per cent. The slight acceler-
ation in growth in advanced economies is being driven by
the United States, whose economy is projected to expand
by 2.9 per cent in 2018; growth in the other advanced
economies is projected to be either slower, or on par with
2017. Growth is steady amongst the emerging market and
developing economies, though risks have risen in some
economies due to a variety of factors including tightening
financial conditions, higher oil prices and geopolitical un-
certainty. Trade tensions, particularly the fallout between
China and the United States is weighing on global growth,
contributing to lower prices for some commodities, while
On a year-to-date basis, GDP slowing trade and investment growth.
by industry is up 2.7 per cent
through August, the seventh The United States economy is benefitting from a strong
consecutive month of growth. economic environment. Real GDP expanded at an annual-
(in Canada) ized rate of 2.2 per cent in the first quarter, accelerating to
an annualized rate of growth of 4.2 per cent in the second
quarter, before slowing slightly to 3.5 per cent in the third
quarter. Economic growth is being driven by personal
consumption expenditures, private inventory investment,
state and local government spending, federal govern-
ment spending and nonresidential fixed investment. This
was partially offset by a decline in exports and residential
fixed investment. Imports increased over this period. The
the second quarter of 2014, while household final consumption expenditures expanded 0.6 per
cent in the second quarter, after increasing 0.3 per cent in the first quarter. Imports and
inventories detracted from GDP growth in the second quarter of 2018.
number of employed people has
Figure 1: Quarterly Real GDP Growth Canada
increased by 1.6 per cent on a year-
1.4%
to-date basis through October, while 1.2%
1.0%
the unemployment rate averaged 0.8%
3.9 per cent over this time period, 0.6%
0.4%
a decline of 0.5 percentage points 0.2%
from the same period in 2017. 0.0%
-0.2%
-0.4%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
In December of 2015, the Unit- 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017 2017 2017 2018 2018
ed States Federal Reserve began Source: Statistics Canada
increasing the federal funds rate,
On an industry basis, the Canadian economy is performing well. On a year-to-date basis, GDP by
which previously had not been sumption expenditures
industry is up expanded
2.7 per cent through At its consecutive
August, the seventh latest ratemonth
announcement
of growth. Goods
producing industries have advanced 3.7 per cent over this time period, while services producing
changed since December 2008. 0.6 per cent
industries haveingrown
the second
by 2.2 perquarter,
on October 24, 2018, the Bank of
cent. Notable gains over this period occurred in mining, up 5.7
Since that time, the Federal Reserve after increasing
per cent, 0.3 up
construction, per4.3cent in the
per cent, wholesale Canada increased
trade, up 4.5 its target forupthe
per cent, manufacturing, 2.5
per cent, and professional, scientific and technical services, up 4.1 per cent. Declines occurred
has increased the federal funds rate first quarter. Imports
in information andindustries,
and cultural inventories down 0.4overnight rate by 0.25
per cent, management percentage
of companies and
on eight occasions so that it present- enterprises, down 1.4 per
detracted from GDP growth in the cent, agriculture, down 0.1 per cent, and administrative
points to 1.75 per cent. The Bank support,
waste management and remediation services.
ly sits between 2 and 2.25 per cent. second quarter of 2018. cites the broader growth in the
There have been three increases so At its latest rate announcement on October 24, 2018, the Bankeconomy,
Canadian of Canada increased
and an its target
interest
for the overnight rate by 0.25 percentage points to 1.75 per cent. The Bank cites the broader
far in 2018, and it is expected that On an industry
growth basis,economy,
in the Canadian and an interestrate
the Canadian rate environment
environment thatthat is projected
is projected to stay
due to the economic environment close to the 2 per cent target as factors for the ratetoincrease.
stay close to the 2 per centraising
The Bank of Canada began target
economy is performing well. On a
interest rates in the second half of 2017. Since that time, the target for the overnight rate has
present in the United States, addi- year-to-date
increased by 1.25basis, GDP by
percentage industry
points. as factors for the rate increase. The
tional increases in the federal funds isProvincial
up 2.7 per cent through August, Bank of Canada began raising inter-
Economic Context
rate will come before the end of the the
Theseventh consecutive
Prince Edward month
Island Economy seen solidest
has of rates in
economic the second
growth halfnumber
over the last of 2017.
of
years. The Island economy has expanded every year since 2008, the only jurisdiction in Canada
year. The balance sheet normaliza- growth.
to do so.Goods
In 2017, producing indus-
the Prince Edward Island economySincegrewthat time,
by 3.5 the target
per cent, forpace
the fastest theof
tion program that began in October tries havesince
expansion advanced 3.7 per
2005. Business cent
gross fixed capitalovernight
formation was rate
thehas
mainincreased by 1.25
driver of growth in
2017, due largely to increased residential construction, and the completion of the power cables
of 2017 continues as planned. As of over this time period, while services percentage points.
October 2018, the Federal Reserve producing industries have grown 3
is shedding $50 billion in assets a by 2.2 per cent. Notable gains over
month from its balance sheet. this period occurred in mining, up
5.7 per cent, construction, up 4.3
As can be seen in Figure 1, Canadian per cent, wholesale trade, up 4.5
quarterly real GDP growth has been per cent, manufacturing, up 2.5 per
positive during the first half of 2018. cent, and professional, scientific and
Real GDP increased by 0.4 per cent technical services, up 4.1 per cent.
in the first quarter, before strength- Declines occurred in information
ening by 0.7 per cent in the second and cultural industries, down 0.4 per
quarter. Exports and household final cent, management of companies
consumption expenditures contrib- and enterprises, down 1.4 per cent,
uted the most to growth in the sec- agriculture, down 0.1 per cent, and
ond quarter. The gain in exports was administrative support, waste man-
the largest since the second quarter agement and remediation services.
of 2014, while household final con-
Highlights of the Prince Edward Island Economy | 5
Provincial Economic
Context
The Prince Edward Island Economy has seen solid economic
growth over the last number of years.
The Island economy has expanded On an industry basis, economic
every year since 2008, the only juris- strength was widespread on the
diction in Canada to do so. In 2017, Island in 2017, with the goods pro-
the Prince Edward Island economy ducing industries increasing by 7.3
grew by 3.5 per cent, the fastest pace per cent, and the service producing
of expansion since 2005. Business industries increasing by 2.2 per cent.
gross fixed capital formation was Economic growth was recorded in
the main driver of growth in 2017, 19 of 20 industries in 2017, admin-
due largely to increased residential istrative and support, waste man-
construction, and the completion of agement and remediation services
the power cables running from New showing declines. Notable increases
Brunswick to Prince Edward Island. over this time period were recorded
Imports, which detract from growth, in construction, up 19.2 per cent,
On an industry basis, economic increased 5.3 per cent, while exports manufacturing, up 5.6 per cent, and
strength was widespread on the
Island in 2017, with the goods increased 1.8 per cent. Household real estate, rental and leasing, up 2.9
producing industries increasing spending was also higher, increasing per cent.
by 7.3 per cent, and the service
producing industries increasing by 2.4 per cent. Prince Edward Island
by 2.2 per cent. was the third fastest growing prov-
ince in the country, behind Alberta
and British Columbia, and grew at
a faster pace than the 3.0 per cent
growth seen nationally.
6 | Prince Edward Island Economic Update 2018
Fiscal Policy
The fiscal situation of the province the small business tax rate of 0.5 On October 23, 2018 it was an-
has also been improving. With percentage points will take effect nounced that the Province has se-
the release of its 2017/18 public January 1, 2019. Taken together cured an agreement with the Federal
accounts, the province posted a these measures will result in an ad- Government concerning implement-
surplus of $75.2 million, consider- ditional $5.3 million in tax savings to ing a price on carbon. The province
ably stronger than the $1.2 million businesses and individuals. Previous- will administer a fuel charge for
ly, the government had announced
surplus projected at budget. Stron- purchasers of carbon-based fuels
that it intends to lower the provincial
ger own-source revenues contribut- at the prescribed federal rates, with
tax on gasoline and diesel, effective
ed to this result, particularly stronger the exception of heating fuel and
January 1, 2019.
corporate income tax and sales tax propane. Farmers, fishers and aqua-
revenue. This better than antici- culturists will be exempted, while
On October 17, 2018 the legal
pated result has resulted in the net other parties currently subject to tax
regime for cannabis began in Prince
debt declining by $37.2 million in
Edward Island and across Canada. exemptions will only pay carbon tax
2017/18, while the net-debt-to-GDP
In order to facilitate this market, on the incremental amount in excess
ratio
Onhas fallen to 32
November per2018
16, cent. the Province released its 2019-2020 Capital Budget Estimates outlining
the province is operating four retail of the current provincial tax on gaso-
the government’s priorities for capital and infrastructure
locations across the Island, three of investment fordiesel.
line and the next
Princefive years.
Edward Island
OnGovernment
November 6, 2018, partly as a
is committed to spending $156.6 million in 2019-2020, an increase of 44 per cent
which are open, and one of which will have the Government of Canada
result of the better than anticipated
from the $108.8 million budgeted in the 2018-2019 capital
remains under construction, as well budget. A positive fiscal situation,
implement Part 2 of the Greenhouse
fiscal situation of the province, the
and increasing needs arising from a growing
as facilitating population
mail-order are driving
delivery. the increase in capital
Gas Pollution Pricing Act on the
Minister of Finance announced tax
expenditures. As can be seen in Figure 2, though
In the initial year of the trajectory of capital
legalization, spending remains the
Island, beginning January 1, 2019,
relief measures targeted to individ-
same, the level of spending has the increased
provincein everytoyear.
expects collectHealth,
tax education and highways and
uals and small businesses. Effective as was previously announced in the
bridges continue to be the focus of government capital spending, with notable initiatives
revenue of $623,000 from the sale of Climate Change Action Plan released
January 1, 2018, the basic person-
including $100 million for investments
al exemption will rise by $500 to
in mental health and addictions, $38 million for a new
legal cannabis. in Spring of 2018.
secondary school in Stratford,
$9,160. An additional reduction in and new electric vehicle charging stations across the Island.
Figure 2: Capital Spending Prince Edward Island
180
160
140
120
100
80
60
40
20
0
2018-19 2019-20 2020-21 2021-22 2022-23 2023-24
2018-2019 Capital Estimates 2019-2020 Capital Estimates
Source: PEI Department of Finance
Highlights of the Prince Edward Island Economy | 7
Population and Immigration
On September 27, 2018 Statistics Canada published its preliminary provincial population
Fiscal Policy continued
Population and
On November 16, 2018 the Province
released its 2019-2020 Capital Bud-
Immigration
get Estimates outlining the govern-
ment’s priorities for capital and in-
frastructure investment for the next
five years. Government is committed
to spending $156.6 million in 2019-
Prince Edward Island once again recorded
2020, an increase of 44 per cent from
the $108.8 million budgeted in the
the fastest population growth in the
2018-2019 capital budget. A positive Atlantic region in 2018
fiscal situation, and increasing needs
arising from a growing population On September 27, 2018 Statistics Prince Edward Island once again
are driving the increase in capital Canada published its preliminary recorded the fastest population
expenditures. As can be seen in provincial population estimates for growth in the Atlantic region in
Figure 2, though the trajectory of July 1, 2018 as well as revisions to 2018, with Nova Scotia’s popula-
capital spending remains the same, the 2001 to 2017 population es- tion growing at 1.0 per cent, and
the level of spending has increased timates. As of July 1, 2018, Prince New Brunswick growing at 0.5 per
in every year. Health, education and Edward Island’s population is esti- cent; Newfoundland and Labrador’s
highways and bridges continue to mated to be 153,244. This represents population declined by 0.6 per cent
be the focus of government capital a yearly increase of 2,678 persons or in 2018. The latest population esti-
spending, with notable initiatives in- a 1.8 per cent annual growth rate. mates are now based on the 2016
cluding $100 million for investments This compares to a national growth Census counts adjusted for census
in mental health and addictions, $38 rate of 1.2 per cent, and the second net undercoverage and incomplete-
million for a new secondary school consecutive year the province has ly enumerated Indian reserves.
in Stratford, and new electric vehicle exceeded the national population
charging stations across the Island. growth rate. Over the last two years
the Island’s population has grown
by 4.3 per cent, the fastest growth
amongst provinces. Figure 3 shows
the population growth rates of Cana-
da and the provinces from 2016-18.
Figure 3: Population Growth 2016-2018 Canada and the
Provinces
5.0
4.0
3.0
2.0
percent
1.0
0.0
-1.0
-2.0
PE ON MB BC AB CN SK QC NS NB NL
Source: Statistics Canada
Net international migration was estimated to be 2,876 in 2017/18. This consisted of 2,102
8 | Prince Edward Island Economic Update 2018 international immigrants, 879 non-permanent residents and 34 returning Canadians entering
the province, while 108 international emigrants and 40 temporarily abroad Canadians left the
province. The number of international immigrants coming to the province declined by 7.1 per
Net international migration Figure 4: Prince Edward Island Components of Growth
was estimated to be 2,876 July 1, 2017 - June 30, 2018
in 2017/18. This consist- 158,000
ed of 2,102 international
157,000
immigrants, 879 non-per-
manent residents and 34 156,000
3,941
returning Canadians en-
3,495
155,000
tering the province, while
108 international emi- 154,000
grants and 40 temporarily
765
153,000 153,244
abroad Canadians left the
province. The number of 152,000
2,102
1,183
international immigrants
151,000 1,440
coming to the province
declined by 7.1 per cent 150,000 150,566
compared to the previous Births Deaths Immigrants Other Interprovincial In Interprovincial
International* Out
12 months. This follows *Other International = 879 Net Non-Permanant Residents - 108 Emigrants + 35 Returning Canadians - 40 Temporary Abroad
a 12.3 per cent increase
in immigrants in 2016/17. Though
There were 1,440 births and 1,183
the number of immigrants coming
deaths on Prince Edward Island from
to the province declined slightly in
July 1, 2017 to June 30, 2018, result-
2017/18, Prince Edward Island still
ing in natural growth (births minus
had the highest immigration rate in
deaths) of 257. Figure 4 shows the
the country at 13.8 per thousand.
population flows that contributed to
The immigration rate for Canada as a
PEI’s population.
whole was 8.2 per thousand.
Between July 1, 1017 and June
30, 2018 Prince Edward Island had
an estimated net inter-provincial
out-migration of 446 people (3,495
in-migrants less 3,941 out-migrants).
Revisions to the 2016/17 estimates
now show that net inter-provincial
migration for the Island over that
period was 440, marking positive
inter-provincial migration for two
consecutive years (2015/16 and Over the last two years the Island’s po-
2016/17). This is the first time that pulation has grown by 4.3 per cent, the
fastest growth amongst provinces.
has happened since 2002/03 and
2003/04.
Highlights of the Prince Edward Island Economy | 9
On an industry basis on the Island,
employment in the goods sector
Employment increased 10.8 per cent through
October. Gains were recorded in
agriculture, construction, manufac-
turing, and other primary industries.
Prince Edward Island continued to have the fourth Through September, manufacturing
highest
Though participation
the labour force is expanding,rate amongstrate
the unemployment provinces behind
is continuing to fall, averaging has been the largest employer in
9.5 per cent year-to-date, down 0.5 percentage points from the same period one year ago. the goods producing sector, with
Alberta,
Nationally, Saskatchewan
the unemployment and
rate averaged 5.9Manitoba
per cent over thisover this period.
time period
employment averaging 6,800 to
date. Nationally, the goods sector
Figure 5: Employment Growth Canada and the Provinces
has expanded 1.6 per cent over this
YTD 2018
3.5
time period.
3.0
2.5
Employment in the service sector
2.0 has increased 0.7 per cent through
percent
1.5 October. Notable gains to date have
1.0 occurred in accommodation and
0.5 food services, finance insurance and
0.0 real estate and educational services,
PE AB ON NS CND QC BC MB NB NF SK while notable declines occurred in
Source: Statistics Canada
public administration, transporta-
OnThrough October,
an industry basis onemployment indi- had
the Island, employment peaked
in the goods in 2013,
sector and saw
increased year-
10.8 per cent tion and warehousing and other
through October. Gains were recorded
cators on the Island have been pos- in agriculture,
over-year declines until this trend other
construction, manufacturing, and services. On a year-to-date basis
primary industries. Through September, manufacturing has been the largest employer in the
itive. According to the Labour Force began to reverse in 2017. If the pace
goods producing sector, with employment averaging 6,800 to date. Nationally, the goods sector through September, retail/wholesale
Survey
has (LFS),
expanded 1.6employment ontime
per cent over this Prince
period. of labour force expansion continues trade continues to be the largest
Edward Island averaged 75,900 on a through the final quarter of the year, employer on the Island, averaging
Employment in the service sector has increased 0.7 per cent through October. Notable gains to
year-to-date basis through October, PEI will exceed its previous labour
date have occurred in accommodation and food services, finance insurance and real estate and 11,200, followed by health and social
an increase of 3.1 per cent from the force in
educational services, while notable declines occurred high recorded
public in 2013.
administration, The
transportation assistance, averaging 10,600 people.
and
same warehousing and other
period in 2017, and the services.
stron- On participation
a year-to-date rate
basis
hasthrough
averaged September,
66.8 Nationally, the service sector has
retail/wholesale trade continues to be the largest employer on the Island, averaging 11,200,
gest growth amongst provinces. per cent, up 1.1 percentage points grown by 1.2 per cent over this time
followed by health and social assistance, averaging 10,600 people. Nationally, the service sector
has grown by 1.2 per cent over this time period. fromSee
theTable
same period
1 for moreindetails
2017.concerning
Prince period. See Table 1 for more details
employment by industrythere
Through October, on thehas
Island.
been an Edward Island continued to have concerning employment by industry
expansion in full-time employment, the fourth highest participation rate on the Island.
According to the Survey of Employment, Payroll and Hours (SEPH), the number of jobs on the
up 3.2
Island per
have cent, while
increased part-time
1.1 per amongst
cent on a year-to-date provinces
basis through behind
August. Alberta,
The number of jobs
has increased in both the goods
employment has increased by 2.8 producing industries, up 3.8 per cent, and in
Saskatchewan and Manitoba over service producing According to the Survey of Employ-
industries,
per cent.upAs0.6canperbe
cent. Growth
seen ranged from a high of 3.8 per cent in British Columbia, to a
in Figure this period. ment, Payroll and Hours (SEPH), the
decline of 2.2 per cent in Newfoundland and Labrador. Nationally, SEPH employment advanced
5, employment
2.2 per cent over thisgrowth
time to date Employment
period. has measures from the two major workforce number of jobs on the Island have
been (SEPH
surveys strongest
and thein LFS)
Prince
haveEdward Is-
been following aThough theover
similar trend labour force
the last is expand-
number of months, increased 1.1 per cent on a year-to-
asland,
can be seen in Figure 6 below.
Alberta and Ontario. Nationally, ing, the unemployment rate is con- date basis through August. The num-
employment has grown by 1.3 per tinuing to fall, averaging 9.5 per cent ber of jobs has increased in both the
cent through October. year-to-date, down 0.5 percentage 8 goods producing industries, up 3.8
points from the same period one per cent, and in service producing
The labour force on the Island has year ago. Nationally, the unemploy- industries, up 0.6 per cent. Growth
expanded by 2.6 per cent to average ment rate averaged 5.9 per cent over ranged from a high of 3.8 per cent
83,800 people through October. this time period. in British Columbia, to a decline of
Prince Edward Island’s labour force 2.2 per cent in Newfoundland and
10 | Prince Edward Island Economic Update 2018Total weekly earnings have grown in all provinces through
Average 73.5 75.8
July, with 2.9% from
growth ranging 2.3a
Utilities were suppressed to meet the requirement of the Statistics Act
high of 3.7 per cent in Quebec, to a low of 0.7 per cent in Saskatchewan.Source: Average
Statisticsweekly
Canada
earnings on the Island have grown by 2.0 per cent in the service sector, led by gains in
Labrador. Nationally, SEPH employ- administrative support, retail/wholesale trade and arts, entertainment and recreation. Average
weekly earnings in theFigure
goods 6: SEPH and
producing sectorLFShaveEmployment
increased 1.7PEI per cent through August.
ment advanced 2.2 per cent over this Over this time period wages in (index Jan 2016 =sector
the manufacturing 100)have increased 1.4 per cent while
time period. Employment measures wages
110 in the construction sector have increased 1.2 per cent.
from the two major workforce sur- 108
106
Though Prince Edward Island has recorded growth in average weekly earnings so far in 2018,
veys (SEPH and the LFS) have been 104
the
102Island, at an average weekly wage rate of $834.21, had the lowest average weekly earnings
following a similar trend over the last in100
the country through August, an average of $31.76 lower than the next lowest province. For
98
Canada as a whole, average weekly earnings have increased 3.0 per cent on a year-to-date basis
number of months, as can be seen in 96
through August.
94
Figure 6. 92
As can be seen in Figure 7, total labour income on the Island, through the second quarter of
2017, grew by 4.1 per cent on a year-to-date basis, tied with New Brunswick for the fastest
Average weekly earnings have growth in the region. Nationally, the compensation of employees grew by 4.8 per cent over this
SEPH Employment LFS Employment
increased 2.1 per cent on a year-to- time period. Source: Statistics Canada
date basis through August. Average
weekly earnings have grown in all Figure 7: Growth in the Compensation of Employees Canada
provinces through August, with and Provinces YTD 2018
7.0% 9
growth ranging from a high of 3.7 6.0%
per cent in Quebec, to a low of 0.7 5.0%
per cent in Saskatchewan. Average 4.0%
3.0%
weekly earnings on the Island have
2.0%
grown by 2.0 per cent in the service 1.0%
sector, led by gains in administra- 0.0%
-1.0%
tive support, retail/wholesale trade
-2.0%
and arts, entertainment and recre- NL SK NS MB AB PE NB CAN ON BC QC
ation. Average weekly earnings in Source: Statistics Canada
the goods producing sector have Consumer Prices
increased 1.7 per cent through $834.21, had the lowest average
On a year-to-date basis through September, consumer prices have increased by 2.5 per cent.
August. Over this time period wages Though Prince
Food inflation hasEdward
increasedIsland hascent on aweekly
by 0.3 per earnings
year-to-date in the
basis, while country
shelter inflation and
energy inflation have increased
recorded growth in average weekly 3.5 per cent andthrough August, an averagefor
12.1 per cent respectively. Prices ofgasoline
in the manufacturing sector have and household heating fuel continue to increase, and are 14.9 per cent and 21.9 per cent higher
increased 1.4 per cent while wag- earnings so far inbasis
on a year-to-date 2018, the September
through $31.76 to
Island, as compared lower thanperiod
the same the next
in 2017.lowest
As Prince
es in the construction sector have atEdward Island isweekly
an average relativelywage
more rate
dependent
of on oilprovince.
for heatingFor Canada
than as aofwhole,
other parts the country,
energy commodities have a larger weight in the province’s CPI basket, with the result being the
increased 1.2 per cent. average weekly earnings have
Table 1: increased 3.0 per cent on a year-to-10
Employment by Industry Prince Edward Island YTD October
2017 2018 percentage total
date basis through August.
YTD YTD change change
thousands of persons unless specified
As can be seen in Figure 7, total la-
Goods Producing Sectors 17.4 19.2 10.8% 1.9
Agriculture 3.0 3.8 26.4% 0.8
bour income on the Island, through
Other Primary Industries 2.5 2.7 8.6% 0.2 the second quarter of 2017, grew by
Manufacturing 6.5 6.8 4.9% 0.3 4.1 per cent on a year-to-date basis,
Construction 5.2 5.8 10.1% 0.5
Service Producing Sector 56.2 56.6 0.7% 0.4
tied with New Brunswick for the
Trade 11.1 11.2 0.7% 0.1 fastest growth in the region. Nation-
Transportation and Warehousing 2.8 2.5 -11.1% -0.3 ally, the compensation of employees
Finance, Insurance and Real Estate 2.6 2.9 11.1% 0.3
Professional, Scientific and Technical Services 3.5 3.5 2.0% 0.1 grew by 4.8 per cent over this time
Management, Administrative and Other Support Services 1.9 1.9 -1.5% 0.0 period.
Educational Services 5.3 5.5 3.6% 0.2
Health Care and Social Assistance 10.5 10.6 0.9% 0.1
Public Administration 6.9 6.6 -4.1% -0.3
Information, Culture and Recreation 2.8 2.7 -1.4% 0.0
Accommodation and Food Services 5.6 6.2 9.6% 0.5
Other Services 3.3 3.1 -4.9% -0.2
Total 73.5 75.8 2.9% 2.3
Utilities were suppressed to meet the requirement of the Statistics Act
Source: Statistics Canada
Figure 6: SEPH and LFS Employment PEI Highlights of the Prince Edward Island Economy | 11
(index Jan 2016 = 100)
110Construction and Housing
The supply and demand of housing has been a major focus through 2018 so
far, with demand for housing outstripping supply, and mismatches between
the type of housing sought and what is on offer. New home construction
and investment in the residential construction sector continue to grow,
though perhaps not at a fast enough pace to alleviate pressure. In the resale
market, supply has trended sharply lower over the last number of years as
strong demand has eroded the supply of homes. Inventory levels are per-
sistently around half of their long run average.
Building Permits Housing Starts Resale Housing
On a year-to-date basis through Sep- Through the first three quarters of According to the PEI Real Estate
tember, total building permits have 2017, housing starts have increased Association, on a year-to-date basis
increased by 11.8 per cent. Non-res- 3.6 per cent, compared to the same through October home sales totaled
idential permits have increased 14.4 period last year. At 698 starts, the 1,798 units, a decrease of 4.8 per
per cent as increases in industrial Island would need in excess of 213 cent from the same period in 2017.
and commercial permits of 62.2 starts to surpass last year’s total of The year-to-date average price was
and 12.5 per cent respectively were 911 starts1. Growth has been dom- $209,246, an increase of 3.0 per cent
enough to offset a 29.7 per cent inated by the multi-unit segment, from 2017.
decline in the value of government up 10.9 per cent, particularly apart-
and institutional permits. Residential ments, up 46.0 per cent. Single-fami-
permits have increased 10.3 per cent ly home starts are down 1.2 per cent
over this timeframe, with growth in through three quarters. Nationally,
both single and multiple permits. housing starts have declined 2.5 per
Nationally, building permits through cent over this time period. Growth
September have increased 3.2 per ranged from a high of 19.1 per cent
cent, with growth occurring in both in Nova Scotia to a decline of 28.6
residential and non-residential com- per cent in Saskatchewan, as can be
ponents. seen in Figure 9.
Through October, in centers on the
Island with more than 10,000 peo-
ple, housing starts have declined 9.9
per cent. Multi-unit starts were flat
over this period, while single family
starts declined 20 per cent.
1 For reference, there were 237 starts in
the fourth quarter of 217. Other years with strong
housing growth (i.e. 2011 and 2012) has starts of
303 and 251 units in their respective fourth quar-
ters.
12 | Prince Edward Island Economic Update 2018Saskatchewan. It is expected that the value of residential investment should continue to grow
through the latter part of 2018, following the rising trend in building permits and housing starts.
Figure 9: Growth in New Housing Starts Canada and the
Provinces YTD 2018
20%
10%
0%
-10%
-20%
-30%
SK NL MB AB ON CAN BC QC NB PE NS
Source: Canada Mortgage and Housing Corporation
Prince Edward Island has been leading the country in growth in new housing investment, with
Residential Investment
growth up 42 per cent on a year to date basis through August. The Island has seen strong Non-residential
growth across
The total all housing
value types, invest-
of residential with single detached starts up
Prince Edward 25.9has
Island perbeen
cent, lead-
semi-detached
starts up 34.4 per cent and row houses up 9.9 per cent, though apartment starts on the Island
ment
have has increased
increased 24.9
204.4 per perover
cent cent
this timeing the country
period. Nationallyinnew
growth in new
housing construction has
Investment
through6.4
increased theper
second quarter
cent over period. housing investment, with growth up Through the first three quarters of
of 2018,
this time
as compared to the same period in 42 per cent on a year to date basis 2018, non-residential investment
2017, the fastest growth amongst through August. The Island has seen has declined by 5.3 per cent com-
provinces for the second year in a strong growth across all housing pared to the same period in 2017. A
row. Investment is up across most types, with single detached starts up 51.7 per cent increase in industrial
components, notably in apartment 25.9 per cent, semi-detached starts construction was not enough to off-
13
housing where investment has up 34.4 per cent and row houses set declines in the commercial and
grown 220.4 per cent year-to-date. up 9.9 per cent, though apartment government and institutional sector
However renovation, formerly the starts on the Island have increased of 15.3 and 27.8 per cent respective-
largest component of residential 204.4 per cent over this time period. ly. Nationally, non-residential invest-
investment, is down 0.6 per cent Nationally new housing construction ment has increased 7.3 per cent over
through the second quarter. Nation- has increased 6.4 per cent over this this time period. Growth ranged
ally, residential investment increased time period. from a high of 44.4 per cent in New-
7.6 per cent over this time period. foundland and Labrador, to a decline
Figure 10 shows year-to-date growth of 8.7 per cent in Saskatchewan.
in residential investment. Growth
ranged from an increase
of 24.9 per cent in Prince Figure 10: Growth in Residential Investment Canada and the
Edward Island to a Provinces 2018 YTD
30.0%
decrease of 9.1 per cent
25.0%
in Saskatchewan. It is
20.0%
expected that the value 15.0%
of residential investment 10.0%
should continue to grow 5.0%
0.0%
through the latter part
-5.0%
of 2018, following the -10.0%
rising trend in building -15.0%
permits and housing PE QC BC NB CAN NS ON MB NL AB SK
Source: Statistics Canada
starts.
Non-residential Investment Highlights of the Prince Edward Island Economy | 13
Through the first three quarters of 2018, non-residential investment has declined by 5.3 per
cent compared to the same period in 2017. A 51.7 per cent increase in industrial constructionPrimary
Industries
Farming Livestock prices for most commod- cent, 22.4 per cent, and 23.1 per cent
Farm cash receipts through the ities have also been weak, particu- respectively. However, prices for
first quarter of 2018 totaled $127.5 larly for cattle. Prices for slaughter soybeans, the Island’s second-largest
million, a decrease of 1.5 per cent cattle and feeder cattle are down crop by value have declined 7.8 per
compared to the first quarter of 8.3 per cent, and 10.9 per cent cent through September. Planted
2017. Crop receipts are down 3.5 per respectively. However, prices for potato acreage was down by 200
cent due to decreases in both pota- both slaughter calves and feeder acres in 2018 to 84,000 acres, the
toes (down 3.8 per cent), and other calves are up 6.3 and 6.4 per cent second smallest planted area since
crops (down 1.7 per cent). Livestock respectively. Hog prices are down the early 1990s. As can be seen in
receipts are up 6.1 per cent, while 11.7 per cent, while slaughter lambs Figure 11, planted acreage followed
direct payments to farmers are down are down 1.4 per cent. For the a largely upward trend from the
13.9 per cent. Absent direct pay- supply-managed commodities, the early 1970s and peaked in 1999 at
ments, farm cash receipts are down price for chickens has increased 0.8 113,000 planted acres, before begin-
0.4 per cent over this time period. per cent while the price for eggs is ning to decline. Harvesting of the
up 1.9 per cent through September. potato crop was delayed due to wet
Milk prices are down 3.6 per cent weather. This has resulted in farmers
through September. not being able to harvest a signifi-
cant portion of the potato crop in
Crop prices, through September, 2018.
have largely been higher than those
acres, the in
recorded second
2017,smallest planted for
with prices area since the early 1990s. As can be seen in Figure 11,
planted acreage followed a largely upward trend from the early 1970s and peaked in 1999 at
wheat,
113,000oats and
planted barley
acres, upbeginning
before 9.9 perto decline. Harvesting of the potato crop was delayed
due to wet weather. This has resulted in farmers net being able to harvest a significant portion
of the potato crop in 2018.
Figure 11: Fifty Years of Potato Planting PEI
110000
100000
90000
80000
acres
70000
60000
50000
40000
30000
20000
2012
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2014
2016
2018
Source: Statistics Canada
Fishing
14 | Prince Edward Island Economic Update 2018 The fishery continues to be an important sector on Prince Edward Island, and demand for Island
seafood products remains strong. The top four seafood species fished and harvested on the
Island are lobster, mussels, snow crab and oysters. According to the department of AgricultureFishing room nights sold at both fixed-roof Visits to the Prince Edward Island
accommodations and campgrounds National Park have increased by 17.9
The fishery continues to be an
have decreased by 1.1 per cent per cent through August, while visits
important sector on Prince Edward
respectively. Though tourism figures to Green Gables have decreased
Island, and demand for Island sea-
are slightly below those recorded by 22.8 per cent. Visits to provincial
food products remains strong. The
in 2017, Canada’s sesquicentenni- heritage sites are down, with total
top four seafood species fished and
al, they are trending above those visitors down 6.2 per cent year-to-
harvested on the Island are lobster,
recorded in 2016. date.
mussels, snow crab and oysters.
According to the department of Ag-
Traffic to the Island via the Confed- On a seasonally adjusted basis
riculture and Fisheries, the volume
eration Bridge has increased 0.7 per through August, sales at food ser-
of lobster landed in 2018 increased
cent year-to-date, while air traffic is vices and drinking places have ad-
from 2017 levels, while mussels and
down 1.0 per cent. Ferry traffic has vanced 6.1 per cent. Growth in food
oysters also had a good year, and are
increased by 2.6 per cent year-to- services and drinking places ranged
seeing solid demand. Disturbances
date, this increase after having both from a high of 7.4 per cent in British
from the new measures intended to
Island ferries returning to normal op- Columbia, to a decline of 0.2 per
protect right whales had a minimal
erations for all of 2017. The number cent in Newfoundland and Labrador.
impact on the fishery, though the
of motorcoach visits has decreased Nationally, sales at food services and
snow crab fishery was impacted
by 4.0 per cent over this time period. drinking places have grown by 5.1
forcing fishermen from Quebec, New
per cent over this time period.
Brunswick and Prince Edward Island
The cruise ship season is ongoing in
to fish closer together.
2018, with ships scheduled to visit
into November. Over 100,000 pas-
Tourism sengers and 45,000 crew are sched-
Information from the department of uled to visit the Island this cruise
Economic Development and Tourism season on 91 ships. The number of
indicates that total overnight stays cruise ship visits through August is
on the Island have decreased by down 0.5 per cent.
1.8 per cent on a year-to-date basis
through August. The number of
Over 100,000 passengers and
45,000 crew are scheduled to
visit the Island this cruise sea-
son on 91 ships.
Highlights of the Prince Edward Island Economy | 15The cruise ship season is ongoing in 2018, with ships scheduled to visit into November. Over
100,000 passengers and 45,000 crew are scheduled to visit the Island this cruise season on 91
ships. The number of cruise ship visits through August is down 0.5 per cent.
Manufacturing
Visits to the Prince Edward Island National Park have increased by 17.9 per cent through
August, while visits to Green Gables have decreased by 22.8 per cent. Visits to provincial
heritage sites are down, with total visitors down 6.2 per cent year-to-date.
Shipments and Exports
On a seasonally adjusted basis through August, sales at food services and drinking places have
advanced 6.1 per cent. Growth in food services and drinking places ranged from a high of 7.4
per cent in British Columbia, to a decline of 0.2 per cent in Newfoundland and Labrador.
Nationally, sales at food services and drinking places have grown by 5.1 per cent over this time
period.
Manufacturing Shipments and Exports
On a year-to-date basis through
On a year-to-date basis September,
through September, thethe
value value ofadjusted
of seasonally seasonally
manufacturing
shipments has increased 6.6 per cent. Growth was recorded in both the durable and non-
adjusted manufacturing shipments
durable goods sectors at 13.9has increased
and 3.5 6.6 Non-durable
per cent respectively. per cent. goods, largely
composed of food and seafood shipments, represent approximately 70 per cent of the Island’s
manufacturing shipments, while durable goods are responsible for the remaining 30 per cent.
As can be seen in Figure 12, through September, all provinces have recorded positive growth
ranging from 3.5 per cent in Ontario, to 18.3 per cent in Newfoundland and Labrador.
Nationally, manufacturing shipments grew 6.1 per cent over this time period.
Growth was recorded in both the du- Figure 12: Growth in Manufacturing Shipments YTD
rable and non-durable goods sectors September
at 13.9 and 3.5 per cent respectively. 20%
18%
Non-durable goods, largely com- 16%
14%
posed of food and seafood ship- 12%
10%
ments, represent approximately 70 8%
6%
per cent of the Island’s manufactur- 4%
ing shipments, while durable goods 2%
0%
are responsible for the remaining 30 ON MB PE QC AB BC NB SK NS NL
per cent. As can be seen in Figure Source: Statistics Canada
12, through September, all provinces On a year-to-date basis through September, international exports have increased 1.1 per cent.
Over this time period, Newfoundland and Labrador has seen the fastest growth in international
have recorded positive growth rang-
exports amongst provinces, up 29.9 per cent, followed by Alberta at 16.9 per cent, and then
ing from 3.5 per cent in Ontario, to
18.3 per cent in Newfoundland and 16
Labrador. Nationally, manufacturing
shipments grew 6.1 per cent over
this time period.
Aerospace exports have been positive on a year-to-date basis
through September, with engine, turbine and power transmis-
sion equipment manufacturing up 6.5 per cent and aerospace
product and parts manufacturing up 12.1 per cent.
16 | Prince Edward Island Economic Update 2018chemical manufacturing have increased 2.4 per cent on a year-to-date basis through
September. Other industrial machinery manufacturing continues to expand on the Island, and is
now the Island’s 8th largest export industry, and has grown 23.2 per cent year-to-date.
The United States continues to be
Figure 13: Growth in Exports Canada and the Provinces YTD
September the destination of the majority of
35
the Island’s exports, with 73.7 per
30 cent of the Islands exports heading
25 there through September. This is
percent (%)
20 an increase of 3.1 per cent over the
15 same period in 2017. As can be seen
10
in Figure 14, since 2008 there had
5
been a general decline in the share
0
ON PE CAN NS BC QC SK MB NB AB NL of the Island’s exports going to the
Source: Industry Canada
United States, a trend which has
OnThea United
year-to-date basis through
States continues to be the destinationAerospace exports
of the majority have been
of the Island’s exports,posi-
with since reversed with the decline of
73.7 per cent of the Islands exports heading there through September. This is an increase of 3.1 the Canadian dollar against the US
September, international exports tive on a year-to-date basis through
per cent over the same period in 2017. As can be seen in Figure 14, since 2008 there had been a
have increased
general 1.1share
decline in the per cent. Over exportsSeptember,
of the Island’s withStates,
going to the United engine, turbine
a trend which has dollar. Germany, France, the Nether-
since reversed with the decline of the Canadian dollar against the US dollar. Germany, France, lands, and China round out the rest
this time period, Newfoundland and
the Netherlands, and China round out the rest ofand power
the top transmission
five destinations equipment
for Island goods in
Labrador hastogether
2018, though seen thethey fastest growth
only account for 8.1 per cent of the Island’sup
manufacturing trade.
6.5 per cent of the top five destinations for Island
in international exports amongst and aerospace product and parts goods in 2018, though together they
provinces, up 29.9 per cent, followed manufacturing up 12.1 per cent. only account for 8.1 per cent of the
by Alberta at 16.9 per cent, and Bioscience exports have been mixed 17 Island’s trade.
then New Brunswick. This perfor- with pharmaceutical and medicine
mance is partially reflective of strong manufacturing down 10.6 per cent,
energy prices seen in 2018 to date. while other basic organic chemical
Nationally, international exports manufacturing have increased 2.4
have increased 6.9 per cent through per cent on a year-to-date basis
September. through September. Other industrial
machinery manufacturing continues
The Island’s food industries have to expand on the Island, and is now
seen some softening in exports so the Island’s 8th largest export in-
far this year. Frozen food manufac- dustry, and has grown 23.2 per cent
turing – the Island’s largest export year-to-date.
industry - has seen exports decline
by 0.9 per cent year-to-date, while
seafood product preparation and
packaging is down 6.4 per cent.
Aquaculture is down 3.4 per cent,
Figure 14: Percentage of Island Exports to the United States
while fishing is down 20.6 per cent
80.0%
on a year-to-date basis through 78.0%
September. Vegetable and melon 76.0%
74.0%
farming (potatoes) is up 40.2 per 72.0%
70.0%
cent year to date.
68.0%
66.0%
64.0%
62.0%
60.0%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018YTD
Source: Industry Canada
Private Sector Forecasts
Below, in Table 2, are the forecasts for real GDP Highlights
growth forof the IslandEdward
the Prince from Canada’s major | 17
Island Economy
banks and two think tanks. Forecasts for 2018 fall in a range of 1.4 per cent growth to 2.8 per
cent growth, averaging 2.1 per cent, while forecasts for 2019 range from 0.8 per cent growth toRetail Trade, Motor Vehicle Sales
and Wholesale Trade Consumer Prices
Continued strong population Wholesale trade on the Island has On a year-to-date basis through
growth, higher income growth and increased 23.4 per cent on a year September, consumer prices have
a positive tourism season are con- to date basis through August, the increased by 2.5 per cent. Food
tributing to another strong year for inflation has increased by 0.3 per
fastest growth amongst provinc-
cent on a year-to-date basis, while
retail sales in 2018. On a seasonally es. Nationally, wholesale trade has shelter inflation and energy infla-
adjusted basis through August, retail advanced 4.5 per cent over this time tion have increased 3.5 per cent
sales have advanced a healthy 4.6 period. and 12.1 per cent respectively.
per cent, the fastest growth amongst Prices for gasoline and household
heating fuel continue to increase,
provinces. Through August, retail The value of new motor vehicle sales and are 14.9 per cent and 21.9 per
sales in the other Maritime prov- has decreased 6.8 per cent on a year- cent higher on a year-to-date basis
inces grew by 2.9 per cent in Nova to-date basis through September, through September as compared
Scotia and by 1.9 per cent in New while the volume of new motor ve- to the same period in 2017. As Prin-
Brunswick. Nationally, retail sales ce Edward Island is relatively more
hicles sold has decreased by 8.8 per
dependent on oil for heating than
increased 3.3 per cent over this time cent. Declines have occurred across other parts of the country, energy
period. all components with sales of both commodities have a larger weight
passenger cars, and trucks down in the province’s CPI basket, with
On an unadjusted basis through the result being the large impact
16.6 and 4.8 per cent respectively.
on inflation seen so far this year.
August, retail sales on the Island Nationally, the volume of new motor Absent energy, consumer prices
have seen strong growth across all vehicles sold has decreased 1.1 per have increased 1.3 per cent over
components. Notable contributions cent, while their value has increased this time period.
to growth have come from motor 3.0 per cent over this time period.
, up Core inflation on the Island (the
vehicle and onparts dealers far 4.3 per Absent energy, consumer prices have increased
1
large impact inflation seen so this year.
1.3 per cent over this time period. measure of inflation excluding vo-
cent, food and beverage stores, up latile components such as food and
4.4 perinflation
Core cent, and
on thebuilding
Island (thematerial
measure of inflation excluding volatile components such as energy) has increased 1.6 per cent
food and energy) has increased 1.6 per cent through September. Nationally, inflation has
and garden equipment and supplies through September. Nationally, in-
increased 2.3 per cent over this time period.
dealers, up 8.9 per cent. flation has increased 2.3 per cent
Retail Trade, Motor Vehicle Sales and Wholesale Trade over this time period.
Continued strong population growth, higher income growth and a positive tourism season are
contributing to another strong year for retail sales in 2018. On a seasonally adjusted basis
1 through Motor
August, retailand
vehicle sales have
parts advanced
dealers a healthy 4.6 per cent, the fastest growth amongst
include
new and usedThrough
provinces. car dealers, otherretail
August, motorsales
vehicle
in the other Maritime provinces grew by 2.9 per cent in
dealers
Nova and automotive
Scotia and by 1.9parts
perand
centaccessories and
in New Brunswick. Nationally, retail sales increased 3.3 per cent
tire stores.
over this time period.
Figure 8: Growth in Retail Sales Canada and the Provinces
YTD August
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
-1.0%
-2.0%
NL MB SK NB AB NS BC CAN ON QC PE
Source: Statistics Canada
On an unadjusted basis through August, retail sales on the Island have seen strong growth
18 | Prince Edward Island Economic Update 2018
across all components. Notable contributions to growth have come from motor vehicle and
parts dealers1, up 4.3 per cent, food and beverage stores, up 4.4 per cent, and building material72.0%
70.0%
68.0%
Private Sector Forecasts
66.0%
64.0%
62.0%
60.0%
Below, in2008Table2009
2, are2010
the forecasts
2011 2012for real
2013 GDP 2014 growth
2015 for2016the2017Island from
2018YTD
Canada’s major banks and two think tanks. Forecasts for 2018 fall in a range Source: Industry Canada
ofPrivate
1.4 per cent
Sector growth to 2.8 per cent growth, averaging 2.1 per cent, while
Forecasts
Below, in Table
forecasts for 2019 2, arerange
the forecasts for real
from 0.8 perGDP
centgrowth
growth for the
to Island
2.5 perfromcentCanada’s
growth,major
banks and two think tanks. Forecasts for 2018 fall in a range of 1.4 per cent growth to 2.8 per
averaging
cent growth,1.7 per cent.
averaging 2.1 per cent, while forecasts for 2019 range from 0.8 per cent growth to
2.5 per cent growth, averaging 1.7 per cent.
Table 2:
Private Sector Forecasts
Real GDP (% growth)
Organization 2017 2018f 2019f Date Issued
Conference Board of Canada 2.8% 2.5% Summer 2018
TD Bank 2.2% 1.7% 18-Sept
RBC 1.4% 1.6% 12-Sept
CIBC 1.7% 0.8% 4-Oct
BMO 1.8% 1.1% 9-Nov
Scotiabank 2.0% 1.6% 15-Oct
National Bank 2.5% 2.0% November 2018
Atlantic Provinces Economic Council 2.2% 2.0% 5- Nov
Average 3.5% 2.1% 1.7%
Forecasts have been revised up since the 2018 Budget, where growth was forecast at 1.7 per
cent for 2018 and 1.2 per cent for 2019. Driving the upward revisions in the forecast for the
Forecasts
Island is thehave
strongbeen revisedseen
performance upacross
sinceathe
wide2018
varietyBudget, where
of economic growth
indicators. was
However,
some forecasters still view the population increases on the Island as a temporary phenomenon.
forecast at 1.7 per cent for 2018 and 1.2 per cent for 2019. Driving the up-
Beginning at the end of 2016, increased immigration began to have a positive impact on the
ward revisions
Island’s in theand
labour market, forecast for theindicators.
other economic Island isThis
thetrend
strong performance
is likely seen
to continue through
the medium term, and consequently, there is likely upside to the average of the private sector
across a wide variety of economic indicators. However, some forecasters still
forecasts.
view the population increases on the Island as a temporary phenomenon. 18
Beginning at the end of 2016, increased immigration began to have a pos-
itive impact on the Island’s labour market, and other economic indicators.
This trend is likely to continue through the medium term, and consequently,
there is likely upside to the average of the private sector forecasts.
Highlights of the Prince Edward Island Economy | 19Outlook 2019
Prince Edward Island has benefitted over the last number of years
from modest, stable growth in real GDP
The construction sector should continue
to see gains through 2019 due to strong
demand on both the residential and non
residential front.
20 | Prince Edward Island Economic Update 2018According to the IMF, the outlook bination of immigration, positive this is a trend that should continue
for the global economy in 2019 is for inter-provincial migration and into the future. The minimum wage
the global economy to expand at a increased retention of international will increase by 70 cents in 2019,
pace of 3.7 per cent, the same pace students. Continued strong immigra- to $12.25 an hour, maintaining
as in 2017 and 2018, and a down- tion through the provincial nominee the highest minimum wage in the
ward revision of 0.2 percentage streams should result in an addition- region, continuing to support wage
points from its April Outlook. The al 2,360 immigrants coming to the growth on the Island.
Bank of Canada revised its forecast Island in 2019, increasing to 2,600
down marginally for the Canadian by 2021. This will continue to help The construction sector should
economy in 2019 from 2.1 per cent boost domestic demand through continue to see gains through 2019
in July to 2.0 per cent in October due 2019 and beyond. due to strong demand on both the
to slightly weaker consumption, net residential and non residential front.
exports and inventories. In September of 2018, Prince Edward On the residential side, new housing
Island closed its immigrant investor construction will continue to acceler-
Recently, Prince Edward Island has stream of provincial nominees to ate through the medium term due to
seen a solid expansion in real GDP. the province to new applicants. The continued levels of immigration and
Due to the mix of industries found impact of this closure will begin to changes to household composition
on the Island, the Island economy be felt in 18 to 24 months, as cur- on the Island. The Canada Housing
has been more stable than other rent applicants are processed. The and Mortgage Corporation (CMHC)
parts of the country over the last province has recently indicated that forecasts starts in the range of 675
number of years. Though the eco- it intends to nominate additional to 875 units in 2019 and 650 to 850
nomic fundamentals of the Island immigrants through its other provin- units in 202, significantly below
economy remain in place, Prince cial nominee streams, so that there projected demand. Demographic
Edward Island has of late been ben- will be no decline in the number of factors and immigration point to the
efitting from the increase in popu- international immigrants moving to need for an additional 1,300 units
lation that has largely been driven the province. This has the potential per year to meet demand, from both
by immigration, increasing demand to increase retention rates, as labour household formation and immigra-
for goods and services on the Island. market immigrants are viewed as tion, a much higher level of housing
This is expected to continue into more likely to stay, which should completions than has occurred on
2019. Due to the above factors the help the Island’s population to con- the Island in recent memory (1986
Province is projecting real growth in tinue to grow, at a faster pace. was the last time there were more
the order of 2.5 per cent, owing ap- than 1,000 completions on the
proximately 1.5 percentage points to Employment should continue to Island). This indicates significant
factors driven by population growth, grow through the medium term as capacity for future expansion in
and 1 percentage point to other the labour force continues to expand residential construction sector (see
economic factors. due largely to increased immigra- Figure 15).
tion, especially as more immigrants
Prince Edward Island should con- are being brought into the province The supply of resale housing at
tinue to benefit from strong inter- through the skilled labour stream. the end of October is at its lowest
national in-migration in 2019. The The economy has been able to level in sixteen years due to several
provincial Population Action Plan absorb the new entrants into the years of very strong demand. CMHC
released in the spring of 2017 has labour market with little difficulty, forecasts home sales on the Island to
plans to grow the population to and with many sectors of the econ- be in the range of 1,950 to 2,200 per
160,000 by 2022 through a com- omy looking for additional labour, year through to 2020, with average
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