Resource-rich provinces in the West, led by Saskatchewan and B.C., will climb to the top of the economic growth charts in the next two years, CIBC World Markets Inc. said in its latest Economic Insights report.
As provinces pick themselves up and dust themselves off from the economic slide, the march back to prosperity will be at varied speeds, said CIBC’s Warren Lovely who authored the bank’s provincial forecast.
CIBC estimates national average real Gross Domestic Profit growth to come in at 2.3% for 2010 and 3.0% for 2011. That’s after a 2.5% contraction in 2009.
“When it comes to economic growth, the “haves” and the “have nots” can be defined by natural resource wealth,” Lovely wrote in the report released Thursday.
And the Canada’s West stands to benefit most from Asia-Pacific growth.
Saskatchewan will lead the pack with GDP pegged at 3% for 2010 and 4.1% in 2011. B.C. is right behind at 2.8% and 3.4% for the next two years respectively.
Saskatchewan, in contrast to other provinces, boasts a strong jobs picture and high consumer demand.
Total employment in Saskatchewan advanced 1.5% last year as its population exploded, CIBC said. Oil, potash, agriculture and uranium products are in demand again, paving the way for production increases.
In B.C., a settling housing market, renewed business investment spurred by the HST, upswings in mining activity and shale gas extraction, a deepening export base and improved transportation infrastructure mean the province is poised to outperform it’s counterparts.
“We don’t see the end of Olympic spending as a significant drag,” the bank said.
The other two Western-most provinces, Alberta and Manitoba, will also see GDP just above or at the national average.
Ontario will also beat the national growth average in 2010 for the first since the loonie began its appreciation in earnest delivering an unprecedented blow to the province’s manufacturing sector. Expected GDP is 2.4% for 2010 and 2.8% for 2011 on restocked inventories.
But Ontario’s comeback will be temporary, the bank warned, as an overvalued loonie and slower U.S. economic recovery weigh on growth.
As far as the country’s East is concerned, Newfoundland and Labrador should rebound strongly with GDP at 2.6% in 2010 and 3.3% in 2011 based on high consumer demand, new energy projects and resumed nickel production pending the resolution of an ongoing labour dispute.
Quebec, New Brunswick, Nova Scotia, and P.E.I. GDP figures are expected to fall below the national average.
