Nova Scotia's economy pumped by high natural gas prices, says RBC



    TORONTO, Oct. 8 /CNW/ - Like other energy-producing provinces, Nova
Scotia's economy is enjoying the benefits of high energy prices and will see
growth remain steady at around two per cent for 2008 and 2009, according to
the latest provincial forecast released today by RBC.
    "The positive effects of higher energy prices are manifesting themselves
in many sectors of Nova Scotia's economy," said Craig Wright, senior
vice-president and chief economist, RBC. "Manufacturing shipments have posted
double-digit gains, energy exports continue to offset drops in other export
commodities, and the higher incomes resulting from the positive terms of trade
are boosting consumer spending."
    According to the report, while natural gas prices have moderated going
into the second half of 2008, they are expected to remain at historically high
levels through 2009. This will keep work related to the Deep Panuke offshore
gas project on track and support increased investment spending.
    The recent improvement in the terms of trade will continue to play out
next year, further stimulating domestic spending. However, for growth to
remain steady in 2009, some spending on two new multi-year projects - the
Keltic Petrochemical plant and Maple LNG terminal - must get underway.
    The outlook for provinces has generally darkened as a result of the
recent dramatic turn in the year-long financial market crisis. The U.S.
economy now appears to be in recession with Europe, the U.K. and Japan also
sinking fast. While Canada is in better position with its financial sector
less heavily impaired, overall growth will be substantially weaker than
previously anticipated.
    Among the provinces, Saskatchewan will lead the way this year and next in
terms of economic growth, with Manitoba closely behind. The Atlantic region is
expected to display continued resilience and should sustain a moderate pace of
expansion for the most part. Conditions in the most western part of the
country are on a deteriorating path. Eroding housing situations and rapidly
slowing growth in consumer spending have prompted downward revisions to the
forecasts for British Columbia and Alberta. With weak external trade
continuing to exert a toll, cracks have appeared in the domestic foundations
of Ontario and Quebec. Ontario will likely see its growth evaporate.

    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    2.8    3.0     9.0    8.0    4.0
    P.E.I.     2.0    1.9    1.4     0.8    0.7    0.5     7.7    5.5    3.5
    N.S.       1.6    2.0    2.0     4.8    4.2    3.2     4.2    5.5    4.0
    N.B.       1.6    2.0    2.5     4.2    4.1    3.3     5.7    5.5    4.0
    QUE.       2.4    0.7    1.2    48.6   45.7   39.0     4.6    5.5    3.5
    ONT.       2.1    0.0    0.4    68.1   75.0   66.5     3.9    5.0    2.8
    MAN.       3.3    3.1    2.3     5.7    5.4    5.4     8.8    8.0    5.5
    SASK.      2.8    3.9    3.5     6.0    6.8    5.3    13.0   12.0    7.5
    ALTA.      3.3    2.2    3.0    48.3   30.2   31.3     9.3    1.5    6.5
    B.C.       3.1    1.2    2.1    39.2   34.8   26.0     6.7    3.0    6.5
    CANADA     2.7    0.9    1.5     228    209    183     5.8    4.7    4.3


                  Employment                CPI

                07     08     09      07     08     09
                --     --     --      --     --     --
    NFLD.      0.7    2.0    0.6     1.4    3.1    2.1
    P.E.I.     1.1    1.7    0.5     1.8    3.8    2.4
    N.S.       1.3    1.1    0.9     1.9    3.6    2.3
    N.B.       2.1    0.9    0.9     1.9    2.2    2.1
    QUE.       2.3    0.8    1.1     1.6    2.5    2.0
    ONT.       1.6    1.5    1.2     1.8    2.6    2.0
    MAN.       1.6    1.8    1.5     2.1    2.5    2.6
    SASK.      2.1    1.6    2.0     2.9    3.4    2.7
    ALTA.      4.7    2.6    2.1     4.9    3.7    2.9
    B.C.       3.2    2.4    1.4     1.7    2.5    2.0
    CANADA     2.3    1.6    1.3     2.1    2.7    2.2
    





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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