Manufacturing drives Prince Edward Island's economic growth, says RBC Economics



    TORONTO, June 22 /CNW/ - According to the latest provincial economic
forecast by RBC, Prince Edward Island's outlook remains healthy, with modest
sub-2 per cent growth expected in 2007 and 2008.
    "The province's economy is holding up well as strong wage gains have
supported a pick up in retail spending," said Craig Wright, vice-president and
chief economist, RBC. "The most significant economic impact has been the
turnaround in the manufacturing sector, where shipments have jumped
17 per cent in the first quarter compared to a year ago."
    The food processing sector, which makes up 65 per cent of total shipments
and 86 per cent of non-durable shipments, has performed solidly. After
bottoming out in the early part of last year, this sector has picked up with
double digit annual growth for the last nine months. An improvement was also
seen in shipments for the aerospace sector, which should stand to gain further
strength in 2008 as global air travel continues to recover.
    Strength in manufacturing is helping to offset weakness in the
construction market, according to the RBC report. Both non-residential and
residential permits have dropped substantially and more softening is expected
for the rest of the year.
    Across Canada, Newfoundland and Labrador will be the provincial growth
leader in 2007 at 7.5 per cent before experiencing a dramatic pull back next
year, shifting the spotlight back onto the more sustainable growth in Western
Canada. Prince Edward Island and Ontario will be at the back of the pack, each
with growth rates just shy of two per cent this year.

    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
                  06     07     08     06     07     08     06     07     08
                  --     --     --     --     --     --     --     --     --
    NFLD.        2.8    7.5    0.5    2.2    2.0    1.8    2.9    5.5    2.0
    P.E.I.       2.0    1.9    1.7    0.7    0.6    0.6    4.1    4.5    3.7
    N.S.         1.1    2.4    2.3    4.9    4.5    4.4    6.3    3.1    3.3
    N.B.         2.6    2.5    2.6    4.1    3.8    3.7    5.5    3.9    4.0
    QUE.         1.7    2.1    2.6   47.9   42.1   39.6    4.5    4.7    4.8
    ONT.         1.9    1.9    2.7   73.4   63.9   60.0    4.0    3.5    4.9
    MAN.         3.3    3.0    3.2    5.0    5.3    4.4    5.8    6.1    6.0
    SASK.        0.4    4.0    3.6    3.7    4.6    3.9    5.9    7.4    6.0
    ALTA.        6.8    4.6    4.0   49.0   44.8   39.9   16.0    9.3    8.5
    B.C.         3.6    3.2    3.3   36.4   35.3   31.1    6.2    6.0    5.8
    CANADA       2.8    2.6    2.9    228    208    190    6.2    5.2    5.2


                    Employment              CPI

                  06     07     08     06     07     08
                  --     --     --     --     --     --
    NFLD.        0.7    1.2    0.1    1.8    2.0    1.4
    P.E.I.       0.6    0.8    0.4    2.3    1.5    1.7
    N.S.        -0.3    1.1    0.3    2.0    1.4    1.3
    N.B.         1.4    0.8    0.4    1.7    1.5    1.4
    QUE.         1.3    2.0    0.9    1.7    2.3    1.8
    ONT.         1.5    1.3    1.0    1.8    2.1    2.1
    MAN.         1.2    1.1    0.9    2.0    2.3    2.5
    SASK.        1.7    3.0    1.0    2.1    3.5    2.8
    ALTA.        4.8    4.2    2.0    3.9    5.2    3.5
    B.C.         3.1    3.0    1.9    1.7    2.2    2.3
    CANADA       2.0    2.0    1.2    2.0    2.4    2.2
    





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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