Quebec's modest growth to outpace Ontario's, says RBC



    MONTREAL, Oct. 12 /CNW/ - Quebec's economy is expected to slow with
growth of only 2.1 per cent in 2007 and 2.3 per cent in 2008, according to the
latest provincial economic outlook released today by RBC.
    "We have modestly downgraded our growth forecast for Quebec, however, we
expect the pace of growth to be a touch faster than 2006," said Craig Wright,
vice-president and chief economist, RBC. "Quebec remains under pressure as the
Canadian dollar sits near parity with the U.S. dollar, oil prices continue to
hit new highs and competition from overseas remains firm."
    According to the report, Quebec's manufacturing sector continues to shed
jobs with 120,000 lost since 2003. The largest and steepest declines for
manufacturers occurred between 2003 and 2006. In 2007, the pace of job losses
is tentatively showing signs of stabilization.
    On a positive note, the $1.8 billion retroactive pay equity payout to
public sector employees coupled with solid job gains this year, have provided
good support to Quebec's domestic economy and a lift to the retail sector in
the second quarter of 2007. RBC forecasts modestly increased growth as big
ticket capital spending shifts into higher gear by 2009.
    RBC notes that Quebec's manufacturing base has been faring better than
its Ontario counterpart. In particular, Quebec's exposure to motor vehicle
manufacturing is minimal, while it has significant exposure to the expanding
aerospace sector. Aerospace shipments, though volatile, were up roughly 11 per
cent this year compared to a year ago.
    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; Raymond Chouinard, RBC Media
Relations, (514) 874-6556; Jimmy Jean sera disponible pour des commentaires en
français


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