OTTAWA, Nov. 8 /CNW Telbec/ - Western provinces will continue to lead the
country in economic growth by a wide margin in 2008, while the strong Canadian
dollar and weak U.S. growth hamper the outlook for Ontario and Quebec,
according to the Conference Board's Provincial Outlook - Autumn 2007.
"Although Central Canada's economic performance is forecast to improve
next year, a full turnaround is not expected until 2009," said Marie-Christine
Bernard, Associate Director, Provincial Outlook. "Again in 2008, western
provinces will benefit from strong commodity prices that will spur development
of their resource industries."
Real gross domestic product (GDP) in Newfoundland and Labrador is
expected to expand by 6.8 per cent this year, topping all provinces. This
performance is fuelled primarily by a huge one-year surge in mining output.
However, offshore oil production will peak in 2007. As result, the economy is
forecast to expand by just 1.5 per cent in 2008.
Saskatchewan's sizzling economy will expand by 4.3 per cent in 2007, due
to soaring potash production and rising migration into the province. As the
mining, consumption and housing boom eases in 2008, the provincial economy
will grow by a more sustainable 2.8 per cent.
A severe slowdown in energy exploration will hold real GDP growth in
Alberta to 3.4 per cent this year. The province's economic growth will
accelerate slightly to 3.6 per cent in 2008, thanks largely to increased
non-conventional oil production.
Manitoba's economy is forecast to grow at a solid average pace of 3.6 per
cent in 2007 and 2008. Construction, both residential and non-residential, is
expected to drive growth. The manufacturing outlook is positive because
shipments have increased despite the high dollar.
Not even the troubled forestry sector-a casualty of the U.S. sub-prime
housing market meltdown-and weakness in manufacturing can stop British
Columbia from posting strong growth of 2.9 per cent and three per cent in 2007
and 2008, respectively. Winter Olympic preparations and public infrastructure
work are maintaining strength in the construction sector.
Although Quebec's domestic economy is thriving, overall growth is held
back by the struggling export-oriented manufacturing sector. As a result,
growth of two per cent is forecast for this year, with a further gain of
2.6 per cent expected in 2008.
Ontario's economy will trail the national average for the next two years,
averaging growth of 2.5 per cent. The auto industry will remain sluggish as
vehicle sales south of the border are expected to falter to a nine-year low.
The fallout from the sub-prime mortgage crisis has dampened U.S. consumer
spending, limiting growth in exports. Still, investment in machinery and
equipment will accelerate in 2008, and the Conference Board forecasts stronger
residential construction in Ontario next year.
Large capital projects in the resource sector will stimulate growth in
New Brunswick and Nova Scotia, with both provinces expected to grow by
slightly more than two per cent in each of the next two years. Prince Edward
Island's economy will grow by 2.4 per cent this year, as a result of personal
income tax cuts and healthy wage gains that have boosted consumer spending.
Slower employment growth next year will weaken overall growth.
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