Newfoundland and Labrador to be the second fastest growing economy in
Canada this year; Nova Scotia the slowest
TORONTO, June 9, 2011 /CNW/ - Atlantic Canada will continue to show
mixed results in 2011, according to the latest Economic Outlook
released today by RBC Economics. Newfoundland and Labrador is expected
to lead the region in economic growth with a four per cent real GDP
growth rate and Nova Scotia is projected to trail with a rate of 1.7
"Canada's most eastern province continues to move full steam ahead with
the second fastest projected growth rate in Canada in 2011, behind only
Alberta," said Craig Wright, senior vice-president and chief economist,
RBC. "Data in the early part of this year showed robust growth in
construction, exports and employment. The natural resource industry,
which has been the central factor in Newfoundland and Labrador's
economic performance in recent years, will continue to be a source of
strength in 2011."
The RBC report notes that while goods-producing jobs make up only about
one-fifth of employment in Newfoundland and Labrador, new jobs so far
this year were concentrated in this sector, with the biggest gains in
construction and manufacturing. Provincial employment grew by 2.8 per
cent in the first quarter alone - the largest quarterly gain in more
than 12 years in the province.
Ongoing major project spending is fuelling non-residential investment
and strong oil revenues continue to flow, thanks to high crude oil
prices, which more than offset the effect of production volume
"We expect these trends to continue through 2011, leading to a four per
cent real GDP growth rate in Newfoundland and Labrador," Wright
indicates. "Next year, we anticipate growth to slow significantly - to
just 1.5 per cent - once the ongoing mining production rebound runs its
Strong demand for New Brunswick's export-oriented manufacturing and
natural resource sectors will continue to drive economic growth in the
province this year. Potash production is benefitting from solid global
demand and an even bigger boost will come once the expansion at the
Sussex Potash mine begins to operate in 2012.
New Brunswick is also seeing signs of improvement in its somewhat
lacklustre domestic economy. Employment has stopped its decline, retail
sales are performing reasonably well and average weekly earnings are
growing at a good pace in the province.
"Although we project only 1.9 per cent real GDP growth in New Brunswick
for 2011, the strength in the export sector should feed through to the
domestic economy more meaningfully next year," explained Wright.
"Growth for 2012 is expected to accelerate to 2.3 per cent and become
more evenly shared across economic sectors via higher employment,
earnings and consumer spending."
Manufacturing was a key contributor to Nova Scotia's economic growth
last year and has continued to perform well in to 2011. Still, the
province's domestic economy had an underwhelming start to the year and
early data points to another year of slow growth.
In the first quarter, Nova Scotia's retail sales, housing starts and
non-energy exports all remained almost flat, while energy production
continued to decline. RBC expects real GDP growth in the province to
ease slightly to a pace of 1.7 per cent in 2011 from an estimated 1.9
per cent in 2010.
"Stronger employment in Nova Scotia has been a bright spot in recent
data. Jobs grew by 1.1 per cent in the first quarter after remaining
essentially flat in 2010," said Wright.
With the start of several new major construction projects next year and
an increase in energy production from the Deep Panuke natural gas
field, RBC foresees a pick-up in Nova Scotia's growth to 2.0 per cent
Canada's smallest province saw modest but broad-based growth of 2.1 per
cent last year, with most industries posting moderate gains. Building
investment played a key role in generating economic activity in Prince
Edward Island over the past two years, spurred by record levels of
The latest data showed strong increases in non-residential investment in
P.E.I. relative to late last year. Continued government investment and
increased demand for agricultural and seafood products will drive
growth a little higher. RBC Economics projects growth for P.E.I. to
move up to 2.4 per cent this year. However, with the federal and
provincial stimulus programs coming to an end, growth is projected to
slow slightly to 2.2 per cent in 2012.
"In the first quarter of 2011, P.E.I experienced the strongest
population growth in Canada. This solid demographic underpinning will
support economic activity over the next two years," said Wright. "The
Island's fledgling bioscience and clean energy industries are helping
to diversify the economy and should allow P.E.I. to balance out the
volatility of its traditional sectors in the longer-term."
The RBC Economics Provincial Outlook assesses the provinces according to economic growth, employment growth,
unemployment rates, retail sales, housing starts and consumer price
The full report and provincial details are available online as of 8 a.m.
ET today at www.rbc.com/economics/market/pdf/provfcst.pdf.
For further information:
Craig Wright, RBC Economics Research, (416) 974-7457
Robert Hogue, RBC Economics Research, (416) 974-6192
Elyse Lalonde, RBC Media Relations, (416) 974-8810