Newfoundland and Labrador's growth to slow dramatically in 2008, says RBC



    TORONTO, Jan. 11 /CNW/ - After occupying the top spot of provincial
growth rates for 2007, Newfoundland and Labrador's economic growth is expected
to slow to a barely noticeable 0.5 per cent in 2008 and one per cent in 2009
as existing megaprojects wrap up construction, according to the latest
provincial economic forecast by RBC.
    "While the province may well become a have-province in 2009, it will take
several years before it stands another chance at posting province-leading
growth rates," said Craig Wright, senior vice-president and chief economist,
RBC.
    According to the report, production volumes have weakened sharply at
Hibernia, but remain on track at Terra Nova, White Rose, and Voisey's Bay.
Because of these projects, exports of energy and industrial goods, which
include key commodities like iron ore and nickel, now account for about
three-quarters of the province's total exports.
    Over the long-term, recent approval for a sizeable production increase at
White Rose is an added support to the economy. In addition to the Hebron oil
field, which is set to start construction in 2010 and put into production by
2013, there is still the potential for construction of a second major oil
refinery at Placentia Bay. This would also coincide with the rough timelines
on the development of Hibernia South and the Lower Churchill hydro project.
"Overall, the next decade is shaping up to bring several favourable
developments to Newfoundland and Labrador," said Wright.
    Across Canada, Alberta leads all provinces with above-average economic
growth, followed by Saskatchewan and Nova Scotia. On the opposite end of the
scale, and showing a complete turnabout with its megaprojects now in
maturation, Newfoundland and Labrador is posting the slowest economic growth
rate of 0.5 per cent, and on its heels is P.E.I., as well as Quebec and
Ontario with its manufacturing woes. However, a more bullish outlook is in
store by the end of this decade for Newfoundland and Labrador, New Brunswick,
Nova Scotia and, in particular, Saskatchewan, where there is a possibility for
a triple play of diamond mining, rich uranium deposits and a massive oil
strike in the southeastern part of the province.
    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.S.T., at
www.rbc.com/economics/market/pdf/provfcst.pdf), provincial forecast details
are as follows:

    
                       Real                Housing             Retail
                        GDP                 starts              sales

                                          Thousands
                  07     08     09     07     08     09     07     08     09
                  --     --     --     --     --     --     --     --     --
    NFLD.        9.0    0.5    1.0    2.5    2.2    1.9   10.0    6.0    2.0
    P.E.I.       1.9    1.2    1.4    0.7    0.6    0.5    9.1    4.5    3.7
    N.S.         2.4    3.0    3.5    4.8    4.5    4.1    4.4    4.9    6.5
    N.B.         2.5    2.5    2.6    4.1    3.8    3.4    6.7    4.5    4.0
    QUE.         1.9    1.7    2.5   49.4   46.9   40.4    4.4    4.0    4.1
    ONT.         1.7    1.4    2.6   68.1   66.2   60.2    3.9    3.5    4.7
    MAN.         3.4    3.1    2.5    5.7    5.7    5.0    9.0    5.3    3.4
    SASK.        4.6    3.8    3.3    5.9    6.1    4.5   12.2    8.5    6.5
    ALTA.        4.3    3.9    3.2   48.3   38.6   35.2    9.7    9.0    8.2
    B.C.         3.0    2.5    3.0   38.6   35.2   28.5    7.1    6.0    7.5
    CANADA       2.6    2.1    2.7    228    210    184    5.9    5.1    5.5


                     Employment              CPI

                  07     08     09     07     08     09
                  --     --     --     --     --     --
    NFLD.        0.7    0.1    0.3    1.5    1.0    1.2
    P.E.I.       1.3    0.4    0.2    1.8    1.3    1.6
    N.S.         1.3    1.8    2.0    1.9    1.1    2.0
    N.B.         1.9    1.7    0.9    2.0    1.2    1.6
    QUE.         2.2    1.2    0.9    1.6    1.1    1.6
    ONT.         1.6    1.0    1.1    1.9    1.0    1.7
    MAN.         1.5    1.2    1.5    2.2    1.7    1.6
    SASK.        2.3    1.6    0.8    3.0    2.4    2.4
    ALTA.        4.8    2.0    1.8    5.1    2.9    2.6
    B.C.         3.2    1.9    2.6    1.8    1.4    2.2
    CANADA       2.3    1.3    1.4    2.1    1.4    1.9
    





For further information:

For further information: Craig Wright, RBC Economics, (416) 974-7457;
Derek Holt, RBC Economics, (416) 974-6192; Amy Goldbloom, RBC Economics, (416)
974-0579; Jackie Braden, RBC Media Relations, (416) 974-2124


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