Full Report: http://www.rbc.com/economics/market/pdf/provfcst.pdf
First Page:
The two months since our last provincial outlook have been very turbulent.
With the unrelenting financial crisis sustaining tremendous stress in global
markets, damage to the “real economy” has mounted, prompting further unprecedented
actions by governments and central banks around the world. Events in
the past two months have been disappointing; we had expected financial conditions
to show clear signs of healing and the weight of the crisis on the North
American and other world economies to lighten. The persistence of the financial
market maelstrom means that the economic downturn will undoubtedly be more
severe than we previously thought, with the United States now in the throes of
a fairly deep recession and Canada no longer able to avoid a short period of
contraction. This bleaker context will have widespread negative implications for
provincial economies. Performance is now expected to be weaker from coast to
coast and, thus, we have revised growth forecasts lower for all provinces.
�� Directly in the storm’s trajectory and already facing serious challenges, Ontario
is expected to be hit the hardest. The province’s economy is forecast to
contract in both 2008 and 2009 for the first time since 1990-91. Given tremendous
uncertainty about the fate of key players in its auto industry, downside risks will
remain elevated.
�� Newfoundland & Labrador is also projected to contract slightly, although
this will stem more from a drop in oil production unrelated to market conditions
than as a consequence of the global crisis.
s3">�� While still carrying some forward momentum entering 2009, Quebec’s economy
is nonetheless about to gear down. Significant weakness in the economies
of its principal trading partners and the unsettling impact of the global crisis on
consumer and business confidence are expected to completely offset the positive
contribution of increased spending on infrastructure projects, causing Quebec’s
real GDP growth to evaporate in 2009.
�� The chill that has brought significant discomfort to British Columbia’s external
trade sector during the past two years is making its way into the domestic
economy, slowing real GDP growth to 0.6% in 2009 from 0.8% in 2008. Activity
in the province should get a meaningful boost in 2010, however, when the world
gathers in Vancouver for the 2010 Winter Games.
�� A fair amount of steam is seeping out of Alberta’s economic engine as cracks
appear in the province’s energy, housing and consumer spending sectors. Nonetheless,
at a downwardly revised 2.1% next year, the province’s real GDP growth
will remain among the fastest in the country.
�� While not entirely immune to the global downturn, the economies of Saskatchewan
and Manitoba will continue to carry substantial momentum during
2009. Saskatchewan isstill projected to lead all provinces and Manitoba should
remain in the top tier. Both provinces are still riding the wave created by the
strong demand and prices that prevailed until recently for their key commodities.
�� Completion of major capital projects and delays in the construction of new
ones will weigh on New Brunswick’s and Nova Scotia’s economic performance,
although growth is forecast to remain positive in both provinces in 2009.
First Page:
The two months since our last provincial outlook have been very turbulent.
With the unrelenting financial crisis sustaining tremendous stress in global
markets, damage to the “real economy” has mounted, prompting further unprecedented
actions by governments and central banks around the world. Events in
the past two months have been disappointing; we had expected financial conditions
to show clear signs of healing and the weight of the crisis on the North
American and other world economies to lighten. The persistence of the financial
market maelstrom means that the economic downturn will undoubtedly be more
severe than we previously thought, with the United States now in the throes of
a fairly deep recession and Canada no longer able to avoid a short period of
contraction. This bleaker context will have widespread negative implications for
provincial economies. Performance is now expected to be weaker from coast to
coast and, thus, we have revised growth forecasts lower for all provinces.
�� Directly in the storm’s trajectory and already facing serious challenges, Ontario
is expected to be hit the hardest. The province’s economy is forecast to
contract in both 2008 and 2009 for the first time since 1990-91. Given tremendous
uncertainty about the fate of key players in its auto industry, downside risks will
remain elevated.
�� Newfoundland & Labrador is also projected to contract slightly, although
this will stem more from a drop in oil production unrelated to market conditions
than as a consequence of the global crisis.
s3">�� While still carrying some forward momentum entering 2009, Quebec’s economy
is nonetheless about to gear down. Significant weakness in the economies
of its principal trading partners and the unsettling impact of the global crisis on
consumer and business confidence are expected to completely offset the positive
contribution of increased spending on infrastructure projects, causing Quebec’s
real GDP growth to evaporate in 2009.
�� The chill that has brought significant discomfort to British Columbia’s external
trade sector during the past two years is making its way into the domestic
economy, slowing real GDP growth to 0.6% in 2009 from 0.8% in 2008. Activity
in the province should get a meaningful boost in 2010, however, when the world
gathers in Vancouver for the 2010 Winter Games.
�� A fair amount of steam is seeping out of Alberta’s economic engine as cracks
appear in the province’s energy, housing and consumer spending sectors. Nonetheless,
at a downwardly revised 2.1% next year, the province’s real GDP growth
will remain among the fastest in the country.
�� While not entirely immune to the global downturn, the economies of Saskatchewan
and Manitoba will continue to carry substantial momentum during
2009. Saskatchewan isstill projected to lead all provinces and Manitoba should
remain in the top tier. Both provinces are still riding the wave created by the
strong demand and prices that prevailed until recently for their key commodities.
�� Completion of major capital projects and delays in the construction of new
ones will weigh on New Brunswick’s and Nova Scotia’s economic performance,
although growth is forecast to remain positive in both provinces in 2009.
