Alberta and Saskatchewan are expected to emerge out of recession and lead the provinces in economic growth this year, according to The Conference Board of Canada’s Provincial Outlook: Spring 2017. British Columbia is forecast to see growth ease this year, but the province will still tie with Saskatchewan for second place.

“The difficulties in the resources sector are slowly dissipating and helping Alberta and Saskatchewan emerge out of recession,” said Marie-Christine Bernard, associate director, provincial forecast. “However, the turnaround is still in its early stages and a full recovery will take time.”

Bernard added, “Economic prospects are also improving across the country, but continued weakness in business investment — both in and out of the resources sector — could hurt economic growth in all provinces down the road.”

The Atlantic provinces will see only modest expansion over the next two years as they deal with an aging population that is limiting growth in labor supply. However, all provinces are expected to see positive economic growth this year, with the exception of Newfoundland and Labrador. Forecasts by province:

Alberta: Following two years of contractions, Alberta’s economy is expected to outperform all provinces and grow by 3.3% this year. Nonconventional oil production in the province will see a big increase this year, while energy investment is expected to make a comeback this year and next. Outside the energy sector, Alberta is benefiting from improvements in labor markets, consumer demand and the housing sector. The province’s manufacturing sector also has a bright outlook.

Saskatchewan: Saskatchewan’s economy is on a more solid foundation than it was one year ago and is forecast to grow by 2.5% in 2017. The energy outlook is more positive and adaptation to the low-oil-price environment has led to growing investment into cost-effective thermal extraction technology, which will provide a significant boost to construction over the next three years. The province’s labour markets are also starting to turn around, boosting growth in household spending.

British Columbia: Real GDP growth in British Columbia is expected to reach 2.5% in 2017 after growing by 3.7% in 2016. Employment, wages, and household spending are all expected to see growth ease. The province’s forestry industry will also struggle over the near term as it deals with the duties on Canadian softwood lumber.

Ontario: Ontario’s economy will continue to perform well, but it is forecast to lose some speed and grow by 2.3% in 2017.

Manitoba: Manitoba’s economy is forecast to expand by a solid 2.1% in 2017, slightly lower than last year’s growth. The province will continue to see strong construction activity. Manufacturing will remain a growth driver for the province, with bright spots in transportation, equipment manufacturing and food processing.

Quebec: Quebec saw an improvement in economic growth last year and this will continue in 2017, with real GDP forecast to advance by 1.8% this year. Quebeckers will have more spending money in 2017, which will provide a boost to the province’s services-based industries. However, the probability that greater protectionist measures will be put in place in the US in the coming years presents a significant downside risk to the province’s export outlook.

Newfoundland and Labrador: Newfoundland and Labrador will be the only province in recession this year, contracting by 3.0%. However, the province will benefit from oil production at the Hebron project starting next year and real GDP is forecast to bounce back strongly.

Nova Scotia: Nova Scotia’s outlook is among the weakest in Canada, forecast to advance by only 0.5% this year. Although ongoing shipbuilding work in Halifax is providing a boost to the manufacturing sector, the province’s construction industry is facing declines over the next two years.

New Brunswick: Despite New Brunswick’s goods-producing sector facing better prospects over the next two years, weak business investment and shifting demographics will limit GDP growth to 1.0% this year.

Prince Edward Island: Prince Edward Island has the best growth prospects among the Atlantic provinces, with real GDP forecast to expand by 1.8% in 2017. The island’s economy is being bolstered by tourism as well as by a strong performance in the manufacturing sector, especially in the food products and in aerospace services.

Separately, Statistics Canada reported today that the country’s real gross domestic product rose 0.9% in the first quarter, following a 0.7% gain in the fourth quarter. Expressed at an annualized rate, real GDP rose 3.7% in the first quarter; in comparison, real GDP in the US rose at an annualized rate of 1.2% in the first quarter.

The Conference Board of Canada reported the Canadian economy kicked off 2017 on a strong note. Real GDP was a bit below financial market expectations for growth of slightly more than 4%, but this does not tarnish the robust performance.

“The Canadian economy sprinted out of the starting blocks in early 2017,” said Craig Alexander, senior VP and chief economist at The Conference Board of Canada. “The pace of growth was strong and broadly based. Economic growth will moderate in the remainder of the year, but a healthy performance is in store. While we still see the Bank of Canada as being on hold, the case for an eventual tightening in monetary policy is getting stronger.”