RBC forecasts solid economic growth for Manitoba
Well positioned for top spot in investment growth for 2006
TORONTO, June 22, 2006 — Manitoba's economy
is expected to grow by 3.3 per cent in 2006 and 3.0 per cent
in 2007, according to the latest provincial economic outlook
released today by RBC Financial Group.
"Manitoba's economic growth remains healthy thanks to
a well-diversified economy," said Craig Wright, vice-president
and chief economist, RBC. "The province will likely continue
to witness fairly stable and diversified growth prospects
this year, which are in line with the Canadian average."
According to the report, Manitoba's wet spring conditions
are a double-edged sword. After rising 25 per cent in 2005,
electricity sales stemming from hydroelectricity generating
capabilities are once again up by 8.5 per cent so far this
year. On the other hand, agriculture is also benefiting but
to a point. Caution is warranted as wet conditions could prevent
full seeding activity and threaten a repeat of last year's
poor quality harvest, that is presently being sold off at
low prices.
The agricultural industry is also benefiting from the rise
of interest in biodiesel, which is lifting canola and corn
prices and spurring some investment activity. However, a risk
lies in the wide spread between oil and biodiesel input prices.
RBC notes that Manitoba will likely be the leader on investment
growth this year compared to last, with ongoing growth in
new home construction, housing resales and retail sales being
further positive drivers in 2006.
While regional differences exist across the country, Canada
is well positioned to absorb global economic shocks as a result
of geographically diversified investments, a strong consumer
sector and sound fiscal policy. Newfoundland and Labrador
will be the provincial growth leader this year with activity
in the oil and nickel sectors driving growth. After Newfoundland
and Labrador, the strongest economies will be west of the
Manitoba-Ontario border for 2006.
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:
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For more information contact:
Craig Wright, RBC Financial Group Economics,
(416) 974-7457
Derek Holt, RBC Financial Group Economics,
(416) 974-6192
Kathy Bevan, RBC Financial Group Media Relations,
(416) 974-8810
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