Conference Board more positive on 2014 GDP growth, scales back 2015 forecast

OTTAWA – The Conference Board of Canada is estimating the economy will grow by 2.2 per cent this year, 0.2 percentage points more than predicted in its summer forecast.

The Ottawa-based think-tank says it was a disappointing start to the year for the economy, but the situation has improved.

The board says the most positive sign is a strong showing in exports in recent months following years of weakness in the sector. A strong U.S. economy and a slightly weaker Canadian dollar is also expected to keep exports strong next year.

However, the board views government spending restraint, especially at the federal level, as a drag that will knock about 0.3 per cent off this year’s economic growth relative to what it would be if last year’s spending levels had continued.

It also expects business capital spending to be weak until picking up in 2015 and 2016 as exports and confidence improve.

For 2015, the board now estimates Canada’s gross domestic product will grow by 2.6 per cent, rather than the 2.7 per cent expected in its summer forecast.