Provincial Economic Momentum Indexes

Following today’s release of retail sales, we updated the Provincial Economic Momentum Indexes. The index values synthesize growth rates of six monthly seasonally adjusted economic indicators.

Q1 highlight is the lack of momentum in the Maritime Provinces, with employment and housing starts contributing negatively in each of the three provinces. In New Brunswick, negative growth rates prevailed in each of the three months. Manufacturing sales also contributed to this setback, likely reflecting a drop in petroleum product exports. With the Q1 drop, the momentum index is now at the same level as in Q12011. In Prince Edward Island, all the six indicators covered fell in March, resulting in the index being down in Q1. In Nova Scotia, the lack of momentum level is due to housing starts and employment.

The story is quite different in Newfoundland & Labrador, which is the province with the strongest momentum in Q1. However, this performance relates to a single indicator, namely wholesale trade. British Columbia is the province with the second highest economic momentum in Q1, thanks to non residential building permits and wholesale trade, especially in building materials and machinery.

Momentum is moderate in Ontario, Quebec and Manitoba. In all the three provinces, employment was a positive contributor. In Ontario, other contributors were housing starts and wholesale trade. In Quebec, non residential building permits contributed, while housing starts did in Manitoba.

The index indicates a slowdown in Q1 in Alberta, but the province remains the one with the largest economic momentum over the last year. In Saskatchewan, the index dropped in Q1 due to retail sales, wholesale trade and non residential building permits. But this province remains among the ones with the strongest economic momentum over the last four quarters.