TORONTO, March 15 /CNW/ - Full-year energy production and ongoing
non-residential construction are helping to offset continuing soft conditions
in Atlantic Canada's forestry sector, according to Scotia Economics' latest
Provincial Trends report.
"Newfoundland & Labrador's energy and mining sectors should shuttle the
province to the top of the pack in 2007," says David Hamilton, Economist,
Scotiabank. "White Rose's sixth production well went online at the end of
2006, with further wells expected to be completed this year. Nickel output at
Voisey's Bay should be strong in 2007, given full-year production and high
prices. In addition, several new call centre openings will support job growth
in information services."
"Prince Edward Island's agricultural industries could benefit from
another good year of lobster catches and potato production," says
Mr. Hamilton. "Several notable construction projects will also be supportive,
including the Charlottetown waterfront development and a number of renewable
In Nova Scotia, natural gas output should increase following the
completion of a compression deck at the end of 2006. The U.S. slowdown will
take a further toll on the lumber industry this year, though pulp & paper
exports should recover following the resolution of a labour dispute in 2006.
Public and private non-residential construction remain supportive, as
development continues at the Port of Halifax, the Halifax airport, and several
"New Brunswick's economy will be driven by a number of major capital
projects in 2007, including the construction of an LNG terminal, refurbishment
of the Point Lepreau nuclear station, and development of several pipeline
projects," says Mr. Hamilton. "The province's mining sector is benefiting from
exploration and drilling activity, which should get a boost this year from
several mine re-openings and construction of a concentrator in the north."
For the third year in a row, Canada is expected to post slower output
growth. Despite the continuing solid gains in the country's resource-rich
regions, manufacturing activity remains under pressure from non-stop foreign
competition, rising input costs and a strong Canadian dollar. Meanwhile,
deteriorating affordability, largely due to higher prices, is expected to put
a chill into the housing market.
Helping to pick up the slack, capital spending will provide solid
support. Not restricted to energy- and mining-rich provinces, such as
Alberta's oil sands, Saskatchewan's uranium mines or Newfoundland & Labrador's
nickel mines and offshore oilfields, non-residential construction will remain
a key source of growth in such areas as public infrastructure, sea and airport
expansions and commercial building developments, just to name a few. The
spillover effect of construction activity should also benefit other sectors.
Services should remain robust, providing solid underlying support to output
growth, as well as employment opportunities.
From a regional perspective, growth in the Western and Atlantic regions
should outpace the national average in 2007, while Central Canada lags behind.
Newfoundland & Labrador is expected to best the other provinces as its mining
sector recovers. A slowdown in non-residential construction will moderate
growth in Alberta and B.C., although the two provinces should remain at the
top of the pack. Ontario and Quebec will likely continue to face weakness in
manufacturing amid industry restructuring.
Scotia Economics provides clients with in-depth research into the factors
shaping the outlook for Canada and the global economy, including macroeconomic
developments, currency and capital market trends, commodity and industry
performance, as well as monetary, fiscal and public policy issues.
For further information:
For further information: Adrienne Warren, Scotia Economics, (416)
866-4315; David Hamilton, Scotia Economics, (416) 866-4212; Paula Cufre,
Scotiabank Public Affairs, 416-933-1093, firstname.lastname@example.org