OTTAWA, May 25, 2011 /CNW/ - Resource-dependent provinces - notably
Newfoundland and Labrador, Saskatchewan and Alberta - will ride high
commodity prices all the way to the strongest economic growth in Canada
this year, according to The Conference Board of Canada's Provincial Outlook - Spring 2011.
"With agricultural, energy and mineral prices heating up, provinces that
have these resources in abundance will do well - despite hesitation
among consumers and tightening fiscal policy," said Marie-Christine
Bernard, Associate Director, Provincial Outlook. "As a result, economic
growth will be much stronger in parts of Atlantic Canada and in the
Prairie provinces than in Central and Eastern Canada."
Newfoundland and Labrador is expected to generate the largest growth in
real gross domestic product (GDP) this year at 4.6 per cent. High
energy and metal prices are prompting resource companies to invest
billions in iron ore projects, nickel processing and offshore oil
developments. Construction output in Newfoundland and Labrador is
expected rise by 20 per cent this year. Prince Edward Island's economy
will expand by a robust 3.3 per cent this year, due in large part to a
second consecutive year of strong increases in wind power electricity
Bright prospects for potash and the energy sector in Saskatchewan will
bolster mining output, which will spill over into related manufacturing
and transportation industries. Real GDP is forecast to grow by 4.2 per
cent this year and next. By the end of 2012, Saskatchewan's
unemployment rate could fall to 4.6 per cent, the lowest in the
Oil sands investment will drive real GDP growth of 3.1 per cent in
Alberta this year. Solid job creation will support income growth and
consumer spending over the near term.
A $320 million refund payment from Manitoba Public Insurance will boost
personal disposable income in the province, and provide a lift to the
domestic economy. Manitoba's real GDP growth is forecast to accelerate
to 2.4 per cent in 2011.
Unlike the rest of the west, British Columbia's economy is in a lull.
The 2010 Winter Olympics and stimulus spending drove real GDP growth of
more than four per cent last year, but in 2011, the economy is forecast
to expand by two per cent. The forestry sector is awaiting a recovery
in the U.S. housing market. In addition the province's construction
output will decline as housing starts make no gains this year and
government infrastructure stimulus eases.
Ontario's auto sector took two steps forward, thanks to a recovery in
U.S. vehicle sales. But it is now taking one step back, because of
supply-chain disruptions brought on by the Japanese earthquake. Vehicle
assembly at Toyota and Honda plants will be held back in the second
quarter. Reduced infrastructure spending will further limit real GDP
growth, which is forecast to be 2.1 per cent this year. Still,
Ontario's domestic economy will benefit from strong income growth and
the creation of more than 125,000 jobs this year.
Quebec can expect slow economic growth over the next two years. Real GDP
is forecast to increase by just 1.8 per cent in 2011. Last year's
fiscal plan laid out tax increases in an effort to balance the
province's books within the next three fiscal years. The province's
trade sector will contribute to growth, but only in 2012, as export
growth accelerates from the recent surge in new orders for aerospace
In 2011, Nova Scotia will generate real GDP growth of two per cent, and
New Brunswick's economy is forecast to expand by just 1.5 per cent.
Both provincial governments are restraining public spending to improve
their fiscal positions; in addition, both provinces can expect moderate
growth in household demand.
SOURCE CONFERENCE BOARD OF CANADA
For further information:
Brent Dowdall, Media Relations, Tel.: 613- 526-3090 ext. 448