Newfoundland and Labrador's economy set to outperform in 2007: RBC Economics



    Softened growth prospects beyond 2007

    TORONTO, March 30 /CNW/ - Strong energy and mining sectors continue to
lead Newfoundland and Labrador's economy to above-average growth of four per
cent for 2007, according to the latest provincial economic outlook released
today by RBC.
    "With production in full swing at all three oilfields and the labour
dispute settled at Voisey's Bay, Newfoundland and Labrador is expected to be
tops for growth in the country this year," said Craig Wright, vice-president
and chief economist, RBC. "However, heading into 2008, Newfoundland and
Labrador will see growth slow thanks in large part to a pullback in private
investment, dwindling oil production and reduced capital spending as
construction on megaprojects winds down."
    The weakness in construction markets is expected to span both
non-residential and housing markets. Newfoundland and Labrador is the only
province reporting a decline in overall 2007 capital spending intentions and
broad-based softening in the housing market has also emerged.
    According to the report, the recent federal budget will have little
effect on the region other than the implementation of a new transfer funding
formula for resource revenues. However, since the Offshore Accord shelters
resource wealth, Nova Scotia and Newfoundland and Labrador can choose between
the existing system or opt into the new formula until the accord expires.
    For the overall Canadian economy, RBC forecasts that the gap between
growth in the more heavily resource based provinces and central Canada will
narrow over 2007-08. Newfoundland and Labrador will be the leader this year
followed by Alberta at 3.6 per cent. Prince Edward Island and Ontario will be
at the back of the pack, each with growth rates of about two per cent.
    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                Housing              Retail
                     GDP                 starts               sales

                                        Thousands
               06     07     08     06     07     08     06     07     08
               --     --     --     --     --     --     --     --     --
    NFLD.     3.5    4.0    1.5    2.2    2.1    2.0    2.9    2.0    2.0
    P.E.I     1.9    1.9    1.7    0.7    0.7    0.7    4.0    2.1    2.1
    N.S.      2.4    2.4    2.3    4.9    4.5    4.4    6.3    3.5    3.0
    N.B.      2.5    2.4    2.6    4.1    3.8    3.9    5.5    3.2    3.2
    QUE.      2.0    2.1    2.7   47.9   42.1   43.0    4.6    4.1    4.0
    ONT.      1.3    2.0    3.1   73.4   66.8   67.7    4.0    4.2    5.8
    MAN.      3.4    2.7    2.9    5.0    4.5    4.3    5.8    4.2    4.1
    SASK.     3.6    2.8    2.9    3.7    3.4    3.3    5.9    5.0    4.5
    ALTA.     6.5    3.6    3.2   49.0   44.0   41.4   16.0    9.3    8.0
    B.C.      4.7    3.4    3.4   36.4   33.9   33.8    6.2    6.6    6.3
    CANADA    2.7    2.5    3.0    229    207    206    6.2    5.2    5.2


                  Employment              CPI

               06     07     08     06     07     08
               --     --     --     --     --     --
    NFLD.     0.7    0.5    0.1    1.8    1.2    1.4
    P.E.I.    0.6    0.6    0.4    2.2    1.0    1.3
    N.S.     -0.3    0.8    0.3    2.1    1.3    1.3
    N.B.      1.4    1.2    0.4    1.6    1.1    1.4
    QUE.      1.3    1.2    0.9    1.7    0.8    2.2
    ONT.      1.5    1.4    1.2    1.8    1.0    2.4
    MAN.      1.2    0.8    0.6    1.9    0.9    1.8
    SASK.     1.7    2.1    0.8    2.0    1.2    2.0
    ALTA.     4.8    3.8    1.6    3.9    3.0    2.6
    B.C.      3.1    3.0    2.0    1.8    1.9    2.8
    CANADA    2.0    1.8    1.2    2.0    1.7    2.4
    





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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