P.E.I.\u2019s GDP grew to $7.9 billion in 2025, an increase of about 2.8 per cent over 2024.<\/p>\n
But Campbell said the pace of growth has changed \u2014 in 2021, for example, the Island\u2019s economy grew by 7.8 per cent.<\/p>\n
One of the biggest questions facing P.E.I.\u2019s economy, Campbell said, is what happens with the province\u2019s population.<\/p>\n
After several years of strong gains driven largely by international migration following the pandemic, P.E.I. has now seen its population decline for three consecutive quarters since July of last year, according to Statistics Canada\u2019s first-quarter 2026 estimates<\/a>.<\/p>\n The data shows more newcomers are leaving the province than arriving<\/a>, all while deaths continue to outnumber births in a province already facing an aging population<\/a>.<\/p>\n \u201cThe decline in population, it’s been a very small decline, but \u2026 that is concerning,\u201d Campbell said.<\/p>\n \u201cA large part of your GDP is associated with household spending, and if you have a population that stops growing and actually slips into decline, that\u2019s going to definitely impact your GDP growth.\u201d<\/p>\n Campbell noted that the labour market still looks healthy. Total employment in May was up by about 4,500 jobs compared to May 2025, and the unemployment rate dipped slightly over the same period.<\/p>\n \u201cI would say the general situation is pretty good, but there\u2019s some storm clouds on the horizon,\u201d he said.<\/p>\n Key industries facing challenges<\/p>\n Construction was the biggest driver of the growth. The sector grew by 18.3 per cent last year, following a 16.2 per cent increase in 2024 as the Island continues to see significant building activity.<\/p>\n Biosciences also saw major growth in 2025, with chemical manufacturing \u2014 including pharmaceutical and medicine manufacturing \u2014 increasing by 26 per cent. It was the fourth consecutive year of growth for that sector.<\/p>\n WATCH | Farm incomes on P.E.I. dropped last year by 34 per cent, or about $37M: Farm incomes on P.E.I. dropped last year by 34 per cent, or about $37M<\/p>\n After several years of growth, new numbers show P.E.I. farms were hit hard in 2025 by rising costs and an historic drought. CBC\u2019s Connor Lamont has the story.<\/p>\n Tourism has continued to do well since the pandemic and appears to be off to a strong start this year, Campbell said.<\/p>\n But other key industries have faced challenges.<\/p>\n Food manufacturing declined in 2025, while Campbell pointed to climate pressures, including last summer\u2019s historic drought<\/a> across the Maritimes, as one factor affecting agriculture.<\/p>\n The oyster industry is also facing an ongoing crisis<\/a> as two diseases continue to devastate populations of the shellfish.<\/p>\n ‘Work with the assets you have’<\/p>\n Another concern is the province\u2019s growing debt.<\/p>\n![\"\"](\"https:\/\/www.newsbeep.com\/ca\/wp-content\/uploads\/2026\/06\/1782650594_695_default.jpg\")
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