This year’s crop is not even fully in the bin yet, but we’re already starting to see the effects of the drought in many parts of the grain belt.
We’ve just received the updated provincial economic forecast, issued by the team at RBC. They’re usually the most upbeat about us, but the drought has caused them to sharply reduce their estimate for this year’s performance. They cut their growth forecast from two per cent which had ranked us in top spot to eight-tenths of a point, which is still growth, but now we’re in the middle of the pack.
This is consistent with the narrative we heard from the provincial government last week as they recast their budget estimates for this year with a sharply lower surplus.
Now RBC says the strike at the west coast port hurt our exports to the Pacific Rim as a further factor in lowering their outlook. On the other side of the equation, they see the drought as a one-off and they expect we will bounce back next year with a nation-leading 2.2 per cent expansion.
