“The plunge in energy investment is expected to slow and we should finally see a resurgence in non-energy investment,” the Conference Board said.
“Canadian exports are also expected to fare a little better as the U.S. economy picks up speed and the Canadian dollar remains weak,” the group said, but added that exports levels will still remain low by historical standards.
Federal stimulus spending is expected to give a boost to national economic growth, although provincial belt-tightening is forecast to offset some of that.
Looking ahead to 2018, “dismal” business investment levels and slowing labour force growth mean it is unlikely there will be any acceleration in GDP growth, they said.
Retail sector seen cooling
The group said that consumer spending has been a “bright spot” in the economy, seeing increases in recent years despite weak job growth in some provinces and soft wage gain.
“However, the ability to sustain these increases will be limited by the run-up in household debt over the last several years,” they said.
The Conference Board sees retail sales growth cooling from 3.8 per cent in 2016 to 2.9 per cent this year and down to 1.9 per cent in 2018.
The soft economic growth expected for this year and next mean the Bank of Canada is expected to hold off boosting interest rates until 2018.
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