Newfoundland and Labrador's economy remains on track as the country's growth leader this year, says RBC Economics



    TORONTO, Oct. 12 /CNW/ - With an anticipated 7.5 per cent growth rate due
to soaring energy production, Newfoundland and Labrador is expected to be
Canada's economic leader in 2007 before sharply cooling off in 2008, according
to the latest provincial economic forecast released by RBC.
    "This year's spike in growth is the result of all four recent
megaprojects firing on all cylinders after Terra Nova's technical problems
last year kept it out of commission," said Craig Wright, vice-president and
chief economist, RBC. "Beyond 2007, growth will drop sharply once the White
Rose gas project and Voisey's Bay nickel project have fully worked their way
into the economy. However, the province deserves strong marks for putting
itself back on track for long-term growth."
    A more upbeat forecast will commence at the start of the next decade as
three projects - the south White Rose extension, South Hibernia, and Hebron -
begin construction. By the middle of the next decade, these projects are all
likely to shift into production. As a result, while economic growth will
soften after this year and until the decade's end, the long-term impact of
these projects will lead to renewed optimism for the next decade.
    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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