Prince Edward Island economy to slow amid uncertain tourism season, says RBC Economics



    TORONTO, July 3 /CNW/ - Prince Edward Island's economic growth is
forecast to slow to the low-to-mid one per cent range for 2008 and 1.6 per
cent in 2009, as stiff economic headwinds blow on key industrial sectors,
including tourism, according to the latest provincial forecast released today
by RBC.
    "The 100th anniversary celebrations of the publication of 'Anne of Green
Gables' are facing some tough challenges from the strong Canadian dollar,
record-high gasoline prices and a weak U.S. economy," said Craig Wright,
senior vice-president and chief economist, RBC. "These factors threaten to
pour cold water on the economic impact of the event and, more generally, the
province's all-important tourism sector."
    With only Canadian travellers sustaining growth in visits to the Island
recently, the sharp rise in gasoline prices since the spring might well keep
even domestic visitors closer to home this year. Nevertheless, the province's
economy should continue to benefit from work on infrastructure projects, as
well as steady growth in employment.
    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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