New Brunswick’s economic engine picked up speed in 2021 after being sideswiped by Covid-19 in early 2020. Three key expenditure components were responsible for the improved performance. First, the combination of a rebound in job growth and rising confidence supported a pickup in retail sales, which rose by +13% in 2021 after a Covid-depressed gain of just +1% in 2020.
Second, fuelled by near record-low interest rates, an unprecedented inflow of international and interprovincial migrants, and the above-noted healthier level of employment, sales of existing homes in the province rose by +22% in 2021 following a gain of +14% in 2020. As a result, existing house prices jumped on average by +25% from $176,000 in 2020 to $195,000 in 2021. This was more than twice the +11% increase that occurred during the previous year.
The third key contributor to New Brunswick’s stronger economic performance in 2021 was an exceptionally large surge in the province’s export sales, almost all of which were shipped to the United States. Across commodities, light oil and petroleum products accounted for 68% of the gain, followed by lobsters and seafood , and lumber .
Consistent with the strong pattern of net migration over the past year, apartment vacancy rates in the province hit a 30-year low of 1.7% at the end of 2021 . Fuelled by this strong pattern of demand, apartment starts are up by +60% year to date. After a modest post-COVID-19 gain of +1.4% in 2021, planned public and private non-residential capital spending in New Brunswick is projected to increase by +7.2% in 2022, according to Statistics Canada. This positive view for capital spending is consistent with theinvestment outlook. It reports a 20% increase in major project investments to a ten-year high of $2.7 billion. APEC attributes the strength to increased investment in electricity, transportation, housing, and public infrastructure.