Manitoba's strong economic growth continues, says RBC



    TORONTO, Oct. 12 /CNW/ - Manitoba's economy continues its balancing act
with steady growth and modest inflation, and is projected to grow by 3.4 per
cent in 2007, and 3.0 per cent in 2008, according to a provincial economic
outlook released today by RBC.
    "Manitoba's economy sits between the super-heated conditions of the west
and the manufacturing doldrums of the east," said Craig Wright, vice-president
and chief economist, RBC. "This privileged position is paying dividends with a
strong economy and yet milder inflation than its western neighbours."
    Farm cash incomes are up sharply across all key sectors including hogs,
cattle and grains. Manitoba's agricultural sector is expected to remain strong
into 2008 as grain prices continue to rise and decent crop conditions persist.
Sharp gains in manufacturing shipments, specifically in electrical and
machinery components, and a strong transportation equipment sector, which
includes bus manufacturing and aerospace segments, helped boost the province's
economy.
    RBC noted that a strong economy, stable labour markets, an influx of
migrants, and mortgage product innovations have combined to create robust
housing market conditions in Manitoba.
    However, there are two dull spots in the province's economic outlook,
according to the RBC report. Hydroelectricity sales are down year-to-date, due
to a steep decline in exports to the U.S. and the rest of Canada. As well,
spending on non-residential construction activities appears to be on a sharp
downward slide, despite favourable investment forecasts earlier this year.
However, momentum in major projects such as the Winnipeg Floodway expansion,
the Wuskwatim Hydroelectric Dam and a new airport facility should lift overall
capital spending in the province.
    Across the provinces, Newfoundland and Labrador is expected to be the
growth leader this year, with Alberta moving into the lead in 2008, rivaled
only by Saskatchewan. Manitoba's steady growth and inflation rates will keep
it in the middle of the western provincial pack, and B.C.'s growth rate will
move slightly downward. RBC's forecast for Ontario's economy has been revised
downward to the bottom of the pack among all the provinces. Quebec should fare
somewhat better than Ontario next year, until currency depreciation, lower
energy prices, improvements in the U.S. economy, and capital spending lift
central Canada's manufacturers and exporters. While P.E.I.'s growth prospects
are modest, Nova Scotia and New Brunswick are well-positioned for better
long-run growth as a result of renewed prospects for several large-scale
capital projects.
    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.D.T., at
www.rbc.com/economics/market/pdf/provfcst.pdf), provincial forecast details
are as follows:

    
                     Real GDP           Housing starts       Retail sales

                                          Thousands
                  07     08     09     07     08     09     07     08     09
                  --     --     --     --     --     --     --     --     --
    NFLD.        7.5    0.5    1.0    2.4     2.1   1.8    9.5    6.0    2.0
    P.E.I        1.9    1.8    1.4    0.6     0.6   0.5    9.0    4.5    3.7
    N.S.         2.4    3.1    3.5    4.7     4.4   4.0    3.8    4.9    6.5
    N.B.         2.5    2.8    2.6    4.1     3.8   3.4    5.6    4.5    4.0
    QUE.         2.1    2.3    2.4   51.5    47.9  42.6    5.0    4.5    4.0
    ONT.         1.9    1.8    2.5   68.6    66.5  60.5    3.6    4.0    4.5
    MAN.         3.4    3.0    2.5    5.8     5.4   4.7    8.7    5.7    3.0
    SASK.        4.8    4.3    3.2    5.8     4.8   3.5   12.5    9.5    6.0
    ALTA.        5.0    4.5    3.0   48.5    41.2  35.0   10.5    9.8    8.5
    B.C.         3.1    2.9    2.8   37.2    32.3  26.8    7.2    6.3    8.0
    CANADA       2.7    2.5    2.6    230     210   184    6.0    5.6    5.5


                     Employment              CPI


                  07     08     09     07     08     09
                  --     --     --     --     --     --
    NFLD.        0.8    0.1    0.3    1.3    1.4    1.2
    P.E.I        1.3    0.4    0.2    1.5    1.7    1.6
    N.S.         1.3    1.2    2.0    1.7    1.3    2.0
    N.B.         2.0    0.8    0.9    1.8    1.4    1.6
    QUE.         1.9    0.9    0.8    1.9    1.6    1.5
    ONT.         1.4    0.9    1.0    2.0    1.8    1.7
    MAN.         1.4    1.0    0.4    2.4    2.1    1.8
    SASK.        2.4    1.0    0.8    3.0    3.0    2.3
    ALTA.        4.9    2.0    1.8    5.4    3.3    2.8
    B.C.         3.2    1.9    2.6    2.1    2.1    2.5
    CANADA       2.2    1.2    1.2    2.3    2.0    1.9
    





For further information:

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


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