Newfoundland and Labrador remain among country's growth
leaders: RBC Economics
Technical problems at Terra Nova slowed overall growth
TORONTO, October 13, 2006 — Newfoundland and
Labrador is expected to grow by 4.7 per cent in 2006 and four
per cent in 2007, slipping into third place among the provincial
growth leaders in 2006 and second in 2007, according to the
latest provincial economic outlook released today by RBC.
"Newfoundland and Labrador's growth forecast was downgraded
for 2006 and upgraded for 2007 due to technical problems at
Terra Nova that will shift some economic activity into next
year," said Craig Wright, vice-president and chief economist,
RBC. "Instead of being the fastest growing economy this
year, we now think the province will rank third behind Alberta
and B.C. and then move into second place behind Alberta in
2007."
According to the report, with both White Rose and Voisey's
Bay in their first full year of production, Newfoundland and
Labrador should have surged to first place on growth this
year. Instead, technical problems at Terra Nova will leave
the province's two year average growth rate virtually unchanged.
However, the shut down at Terra Nova will be a short-lived
blemish in a year marked by the influence of twin mega projects
- White Rose (gas) and Voisey's Bay (nickel) -both of which
are in their first full year of production and that will lift
exports and overall economic growth.
RBC notes that the province's remaining sectors have lagged
the rest of Canada. Now that construction work is completed
at Voisey's Bay and White Rose, non-residential construction
should continue to soften markedly, and a continued lack of
jobs is expected to keep unemployment high. As a result, housing
markets continue to cool, with housing starts down 12 per
cent this year compared to a year ago, and year-to-date annual
house price growth dipping into negative territory.
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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