OTTAWA, Aug. 10 /CNW Telbec/ - Canada's three territories are expected to post strong economic growth this year, thanks to a rebound in global demand for commodities, according to The Conference Board of Canada's latest Territorial Outlook, a Centre for the North publication.
"A return to growth in the U.S. and global economies has helped diamonds, minerals, and metals regain their lustre," said Marie-Christine Bernard, Associate Director. "This increased demand for commodities has reignited mining production and exploration in the North."
The Northwest Territories will benefit from a surge in diamond mining production - its most important commodity. The market for diamonds was particular weak during the recession as consumer spending on luxury goods fell sharply, but diamond prices are approaching pre-recession levels. After contracting by close to 6 per cent in 2009, real gross domestic product (GDP) in the N.W.T. is expected to expand by 4.8 per cent this year. Nevertheless, employment in the territory is not expected to pick up until 2011. The unemployment rate is expected to average 7 per cent over the next three years, significantly higher than pre-recession levels.
Yukon was one of the few bright spots in North America in 2009, as it led all provinces and territories last year with economic growth of 1.4 per cent. This year, metal mining output is projected to increase and the construction industry will benefit from non-residential investments of more than $400 million. In addition, industries that suffered during the recession, such as commercial services and retail trade, will begin to recover. All in all, real GDP is forecast to increase by 4.9 per cent in 2010, although recent developments in the mining sector could pose some downside risk to overall growth.
Nunavut's real GDP is expected to expand by 12.9 per cent in 2010, completely erasing last year's decline of 10.6 per cent. The contraction was due largely to the completion of the Meadowbank gold mine. This year, a rejuvenated mining industry and a recovery in construction activity will drive growth. The large public administration sector will continue to stabilize the territory's economy over the forecast period.
This forecast is produced as part of the Conference Board's Centre for the North, a five-year program of consultation, research and dialogue designed to develop a shared vision of sustainable prosperity in the North. Over its five-year mandate, the Centre for the North will help to establish and implement strategies, policies and practices to transform that vision into reality.
SOURCE Conference Board of Canada
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