New Brunswick economic growth in 2024 predicted to be weaker than Maritime neighbours again

The New Brunswick government has been touting a "muchhealthier economy"in the province in recent years but economists with four major Canadian banks are projecting New Brunswick will finish last among the three Maritime provinces in economic growth in 2024 for what theirestimates show will be a fourth straight year.

Numbers released last fall byStatisticsCanada show New Brunswick finished behind both Nova Scotia and Prince Edward Island in growth in 2021 and 2022.

Figures for last year will not be finalizedfor a number of months but the Bank of Montreal, Scotiabank, TD and the National Bank all estimate New Brunswick finished third among the three Maritime provinces again in 2023and forecast the same third place result for 2024.

"The external backdrop has taken some wind out of N.B.'s sails and we expect exports to remain relatively soft,"TD wrote in its March 20 analysis of New Brunswick's 2024 prospects.

"Manufacturingsales, which are lagging other provinces, are tracking for a fifth consecutive quarterly decline."

It is not the picture painted by New Brunswick Finance Minister Ernie Steeves last week during a budget speech that cited his government's "economic success" on a number of fronts, under the theme "Stronger than Ever."

In an obvious comparison to the previous New Brunswick government of Brian Gallant, Steeves claimed the province's economy has improved considerably since 2018.

"A short time ago, we had weak economic and population growthand unsustainable public finances," said Steeves."Today, we have a much healthier economy with significant growth potential, record population growthand sustainable public finances."

Steeves accurately noted New Brunswick government debt levelsare significantly lower than they were in 2018, the province's population has grown substantially, and there are more jobs to serve that population. But whether that all adds all up to a much healthier economy is less certain.

In his speech,Steeves said his department is projecting "real GDP [Gross Domestic Product]growth of 0.7 per cent" in 2024, after what his department estimates was 1.1 per cent growth in 2023.

By comparison, economic growth in the final two years of the Gallant government, which Steevescriticized as "weak," was higher at 2.4 and 1.4 per cent, with none of the four years under Gallant posting a growth rate as low as his 2024 prediction of 0.7 per cent.

Rather than breaking with the past, Steeves's projections continue a long pattern of mediocre economicgrowth for New Brunswick that now stretches back for nearly a generation.

According to StatisticsCanada, economic growth in New Brunswick has not matched or exceeded growth in Prince Edward Island since Shawn Graham was premier in 2007.That is 15 straight years of being outperformed, as of2022, and 17 straight years if projections made by the four banks for 2023 and 2024 hold true.

Economic growth in Nova Scotia was also greater than in New Brunswick in all but three of those years.

There are several ways to measure that long stretch of weak growth, including New Brunswick's GDP per capita, which was 110 per cent of P.E.I.'s GDP per capita in 2007.It is now lower after being surpassed by the island province for the first time in 2022.

Fred Bergman, a senior policy analyst with the Atlantic Economic Council, said thereis no disputing economic growth in Nova Scotia and Prince Edward Islandhas been outpacing growth in New Brunswick in recent years but understanding the reasons for it would take a lot of analysis.

"You've really got to dive into the data to get at this, and it'sa very complex thing," said Bergman.

"A lot of it is due to differences obviously in economic structure between each of the provinces, but the real devil is in the details.You've got to figure out what's driving the growth and what's keeping it slower."

Leaving estimates for 2023 and 2024 aside, StatisticsCanada figures show "real" economic growth, not including price inflation, was 36.1 per cent in P.E.I. between 2007 and 2022.That compares to 19.7 per cent in Nova Scotia and 10.4 per cent in New Brunswick.

Includedin those numbers are the four Brian Gallant years, 2015 to 2018, when growth in New Brunswick totalled 5.6 per cent.That was well behind P.E.I., at 10.2 per cent, and just short of growth in Nova Scotia, at 6.1 per cent, in those same years.

During the first four years of Premier Blaine Higgs's government, ending in 2022, figures from Statistics Canada show growth in New Brunswick was 4.3 per cent.That was also third best in the Maritimes, well behind growth in P.E.I. of 13.4 per centand just better than half the growth rate achievedin Nova Scotia of 7.9 per cent.