Newfoundland and Labrador's economic growth to take a rest this year, says RBC Economics



    TORONTO, July 3 /CNW/ - After leading all provinces in 2007 with a growth
rate of 9.1 per cent, Newfoundland and Labrador's economy will slow down
significantly this year, posting growth of 0.2 per cent for 2008 and 1.3 per
cent in 2009, according to the latest provincial forecast released today by
RBC.
    "We do not expect a repeat this year of the outsized, energy-induced
advance recorded in 2007," said Craig Wright, senior vice-president and chief
economist, RBC. "The giant 21 per cent increase in oil production that
resulted last year from White Rose's expansion and Terra Nova's return to full
operation will not reoccur, as no further expansion is planned in the near
term."
    The report noted that, the volume of energy output is even likely to
decline a little this year, as the producing oil fields mature. However, high
energy prices and their boosting effect on incomes in the province should
provide a powerful offset, supporting strong consumer spending and robust
construction activity. Vigour in the metal mining sector will also positively
contribute to economic growth.
    Housing should remain a bright spot for the economy, as demand benefits
from an improving job market and a net inflow of people coming from other
provinces, many of whom likely to be ex-Newfoundlanders who had previously
left during tougher economic times.
    The main theme of the Provincial Outlook continues to be the different
paths the Eastern and Western parts of the country are taking. Record-high
commodity prices and strong global demand for resources sustain unprecedented
prosperity in the Western provinces, while the strong Canadian dollar,
downturn in the U.S. economy and high energy prices continue to cause hardship
in key sectors in provinces east of Manitoba. Saskatchewan is projected to
lead all of the provinces in economic growth for both 2008 and 2009, followed
by Alberta, while Newfoundland and Labrador and Ontario are expected to lag
the group this year, but should show some improvement next 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
                  07    08    09        07    08    09        07    08    09
                  --    --    --        --    --    --        --    --    --
    NFLD.        9.1   0.2   1.3       2.6   2.6   2.0       8.9   6.0   2.0
    P.E.I.       2.0   1.2   1.6       0.8   0.7   0.6       7.7   4.5   3.7
    N.S.         1.6   2.0   2.4       4.8   4.7   4.0       4.2   5.5   4.5
    N.B.         1.6   2.0   2.5       4.2   4.2   3.4       5.7   4.6   4.0
    QUE.         2.4   1.0   2.3      48.6  47.1  40.0       4.6   4.3   4.4
    ONT.         2.1   0.7   2.2      68.1  68.7  59.3       3.9   4.4   4.5
    MAN.         3.3   2.7   2.7       5.7   5.9   4.5       8.8   8.5   7.0
    SASK.        2.8   3.7   3.8       6.0   6.6   4.5      13.0  12.0  11.0
    ALTA.        3.3   3.1   3.0      48.3  38.3  35.1       9.3   4.5   7.0
    B.C.         3.1   2.2   2.9      39.2  37.2  30.5       6.7   4.5   7.5
    CANADA       2.7   1.4   2.5       228   216   184       5.8   5.2   5.6


                   Employment                CPI


                  07    08    09        07    08    09
                  --    --    --        --    --    --
    NFLD.        0.6   2.0   0.5       1.5   2.5   1.4
    P.E.I.       1.0   1.3   0.3       1.8   3.2   1.5
    N.S.         1.3   1.0   1.9       1.9   3.0   1.6
    N.B.         2.1   1.6   1.0       1.9   1.8   1.5
    QUE.         2.3   1.4   1.3       1.6   2.2   1.4
    ONT.         1.6   1.5   1.3       1.8   2.0   1.5
    MAN.         1.6   2.1   1.7       2.0   2.0   1.5
    SASK.        2.1   2.4   2.3       2.8   3.4   2.6
    ALTA.        4.7   3.0   2.1       5.0   3.3   2.5
    B.C.         3.2   2.6   2.5       1.8   2.0   1.5
    CANADA       2.3   1.9   1.6       2.1   2.3   1.6
    





For further information:

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


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