Stable economic growth is expected for Prince Edward Island, says RBC Economics



    TORONTO, Oct. 12 /CNW/ - Prince Edward Island's economic growth rate is
expected to be just shy of 2 per cent for 2007 and 2008, according to the
latest provincial economic forecast by RBC.
    "The tourism industry had a good year and it nicely complements the
potentially best potato harvest the region has seen in the past few years,"
said Craig Wright, vice-president and chief economist, RBC.
    According to the report, there was some concern in the potato industry in
July over a few cases of late blight. However, the potentially devastating
problem does not appear to have materialized into a significant threat as
potato growers enter their peak harvest season. While it's still too early to
tell exactly how the harvest will play out, there are some early signs that
potato growers may have a better yield in 2007 than in the past two years.
    Potato processing plants are looking at another reasonably good year and
continue to drive strong manufacturing shipments. Food processing shipments
have grown at a double-digit annual pace for the last 12 consecutive months.
    According to the report, growth prospects for other aspects of the
domestic economy are mixed, as construction activity continues to cool while
growth in consumer spending remains robust. This is significant since consumer
spending in P.E.I. represents a larger share of the economy than in any other
province.
    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; Jackie Braden, RBC Media Relations,
(416) 974-2124


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