Strong energy and export sectors help Saskatchewan lead the country in economic growth: RBC



    TORONTO, Oct. 8 /CNW/ - Saskatchewan is expected to lead all provinces in
economic growth for the next few years as overall GDP will rise 3.9 per cent
for 2008 and 3.5 per cent for 2009, according to the latest provincial
economic outlook released today by RBC.
    "The province continues to enjoy the effects of recent exceptionally high
prices for most of its key exports such as grains, oil, potash and uranium,"
said Craig Wright, senior vice-president and chief economist, RBC. "While
these prices have come down from their peaks, they are expected to remain
elevated well into 2009."
    Saskatchewan's strong resource revenues continue to positively impact
incomes, which in turn support both business investment and household
spending. The 14 per cent surge in retail sales so far this year, is almost
triple the national average (five per cent). Housing starts are also on the
rise - projected to reach 6,800 units in 2008, up from an already-strong
6,000 units last year - although the spike in home prices will erode
affordability and slow the pace in 2009.
    The report pointed to some upside to the results of a Statistics Canada
survey on private and public investment intentions published earlier this
year, which ranked Saskatchewan first in the country with projected growth of
around 18 per cent. Based on numerous new projects at various stages of
development for the province's potash and uranium deposits, as well as ongoing
oil resource expansion like the Bakken deposit, Saskatchewan appears to be on
track to exceed this projection this year and maintain a high level of
activity next year. Certainly, record sales of oil and natural gas rights
recently attest to the dynamism of Saskatchewan's energy sector.
    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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