Alberta leads economic growth in Canada: RBC Economics
Strong growth feeding a growing inflation risk
TORONTO, October 13, 2006 — Alberta is expected
to be Canada's top economic performer with the strongest growth
rate in a decade at 6.3 per cent in 2006, which will be followed
by growth of 4.5 per cent in 2007, according to a provincial
economic outlook released today by RBC.
"For 2006, Alberta has the strongest forecast growth
rate in a decade, with much of the momentum expected to carry
over into 2007," said Craig Wright, vice-president and
chief economist, RBC. "Alberta currently tops the rest
of the country with the lowest unemployment rate, and the
fastest trend growth in retail sales, new home construction,
residential building permits for future construction, and
manufacturing shipments."
RBC notes that Alberta's strong growth is largely due to
soaring energy prices, which have since softened, but remained
higher for longer than anticipated. Looking beyond the energy
patch, agriculture is also contributing to Alberta's growth,
with a greater likelihood that 2006 will see a higher quality
crop and better crop prices than last year.
According to the report, inflationary bottlenecks have grown
in recent months. Wages are now more than eight per cent higher
than a year ago, and the CPI rate of inflation now tops the
country, at almost five per cent compared to a year ago. These
are clear signs of overheating against a backdrop of labour
and material shortages.
"For 2007, despite risks, we think Alberta will maintain
the lowest unemployment rate, the fastest income growth, the
strongest growth in retail sales, and the fastest growing
workforce of any province in the land," said Wright.
For the overall Canadian economy, RBC has revised its 2006
growth forecasts downward with Ontario being sharply downgraded
to last place among the provinces. Alberta and British Columbia
are now in first and second place respectively, bumping Newfoundland
and Labrador to third place for growth in 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.
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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
Beja Rodeck, RBC Media Relations,
(416) 974-5506
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