Oil and nickel sectors driving growth in Newfoundland and
Labrador: RBC EconomicsSet to be provincial growth leader this year
TORONTO, June 22, 2006 — Newfoundland and Labrador's
economy continues to be powered by the expansion of the energy
and mining industries, according to the latest provincial
economic outlook released today by RBC Financial Group.
"Oil production now accounts for about 16 per cent of
the province's real GDP, and the expansion of this sector
will boost economic growth to 6.5 per cent for 2006,"
said Craig Wright, vice-president and chief economist, RBC.
"However, we expect a relatively sharp pullback in 2007,
to 2.3 per cent, as this one-time boost was supported by the
start up of the White Rose and Voisey's Bay projects."
With both the White Rose and Voisey's Bay projects in full
production, offshore oil production is forecast to increase
by 17.5 per cent to 131 million barrels in 2006. Operations
at White Rose have been smooth so far while the Hibernia and
Terra Nova fields have not fared as well. Production difficulties,
coupled with a planned 90-day maintenance shut down for Terra
Nova ending in September, are expected to reduce its 2006
production to 27 million barrels.
While Newfoundland and Labrador is benefiting from the oil
and gas boom, substantially weaker non-residential construction
activity and a further retreat in housing starts as the market
cools is expected, noted the report.
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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