British Columbia maintains modest economic growth, says RBC



    TORONTO, Jan. 11 /CNW/ - British Columbia's economic growth is on track
and expected to come in at 2.5 per cent in 2008 and three per cent in 2009,
but continues to face long-term pressures on future economic growth, according
to a provincial economic outlook released today by RBC.
    "Several of British Columbia's key cyclical growth drivers are at turning
points, capital spending will likely peak over the next few years, vulnerable
exports are being hit, and the pine beetle threat still looms," said Craig
Wright, senior vice-president and chief economist, RBC. "Growth will slow as
the balance of risks to the province's economy over the long term has swung
more towards the pessimist's camp."
    According to the report, public capital spending is expected to have
peaked in 2007 at $5.5 billion. However, it will remain at around $5 billion
in 2008 but this is not expected to have as positive a growth impact as it has
had over the past five years. This softening will also amplify the effects of
a slowdown in other critical sectors like forestry and energy. Relative to a
$200-billion economy, there is a record high $135 billion earmarked for
capital projects. However with half the projects already under construction,
the remaining proposed projects will represent only modest stimulus for the
economy over the next decade.
    Exports remain under pressure and were down about six per cent for most
of last year, primarily due to the U.S. housing slowdown and soft lumber and
natural gas prices. Pulp producers, however, are the noticeable exception to
this bleak export picture. A bullish pricing environment and strong global
demand will help pulp producers, but excess global capacity coming on stream
may dampen prices later in the year.
    Across Canada, Alberta leads all provinces with above-average economic
growth, followed by Saskatchewan and Nova Scotia. On the opposite end of the
scale, and showing a complete turnabout with its mega-projects now in
maturation, Newfoundland and Labrador is posting the slowest economic growth
rate of 0.5 per cent, and on its heels is P.E.I., as well as Quebec and
Ontario with its manufacturing woes. However, a more bullish outlook is in
store by the end of this decade for Newfoundland and Labrador, New Brunswick,
Nova Scotia and, in particular, Saskatchewan, where there is a possibility for
a triple play of diamond mining, rich uranium deposits and a massive oil
strike in the southeastern part of the province.
    The RBC Economics Provincial Outlook assesses the provinces according to
economic growth, employment growth, unemployment rates, personal income
growth, retail sales, housing starts and the Consumer Price Index.
    According to the report (available online as of 8 a.m. E.S.T., at
www.rbc.com/economics/market/pdf/provfcst.pdf), provincial forecast details
are as follows:

    
                       Real                Housing             Retail
                        GDP                 starts              sales

                                          Thousands
                  07     08     09     07     08     09     07     08     09
                  --     --     --     --     --     --     --     --     --
    NFLD.        9.0    0.5    1.0    2.5    2.2    1.9   10.0    6.0    2.0
    P.E.I.       1.9    1.2    1.4    0.7    0.6    0.5    9.1    4.5    3.7
    N.S.         2.4    3.0    3.5    4.8    4.5    4.1    4.4    4.9    6.5
    N.B.         2.5    2.5    2.6    4.1    3.8    3.4    6.7    4.5    4.0
    QUE.         1.9    1.7    2.5   49.4   46.9   40.4    4.4    4.0    4.1
    ONT.         1.7    1.4    2.6   68.1   66.2   60.2    3.9    3.5    4.7
    MAN.         3.4    3.1    2.5    5.7    5.7    5.0    9.0    5.3    3.4
    SASK.        4.6    3.8    3.3    5.9    6.1    4.5   12.2    8.5    6.5
    ALTA.        4.3    3.9    3.2   48.3   38.6   35.2    9.7    9.0    8.2
    B.C.         3.0    2.5    3.0   38.6   35.2   28.5    7.1    6.0    7.5
    CANADA       2.6    2.1    2.7    228    210    184    5.9    5.1    5.5


                     Employment              CPI

                  07     08     09     07     08     09
                  --     --     --     --     --     --
    NFLD.        0.7    0.1    0.3    1.5    1.0    1.2
    P.E.I.       1.3    0.4    0.2    1.8    1.3    1.6
    N.S.         1.3    1.8    2.0    1.9    1.1    2.0
    N.B.         1.9    1.7    0.9    2.0    1.2    1.6
    QUE.         2.2    1.2    0.9    1.6    1.1    1.6
    ONT.         1.6    1.0    1.1    1.9    1.0    1.7
    MAN.         1.5    1.2    1.5    2.2    1.7    1.6
    SASK.        2.3    1.6    0.8    3.0    2.4    2.4
    ALTA.        4.8    2.0    1.8    5.1    2.9    2.6
    B.C.         3.2    1.9    2.6    1.8    1.4    2.2
    CANADA       2.3    1.3    1.4    2.1    1.4    1.9
    




For further information:

For further information: Craig Wright, RBC Economics, (416) 974-7457;
Derek Holt, RBC Economics, (416) 974-6192; Amy Goldbloom, RBC Economics, (416)
974-0579; Jackie Braden, RBC Media Relations, (416) 974-2124


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890