West remains best in growth: report

The province of Manitoba is expected to lead the rest of the country in economic growth in 2008, according to the Conference Board of Canada’s Provincial Outlook — Winter 2008.

“Boosted by ongoing construction projects, robust domestic spending and an optimistic outlook for manufacturing, the Manitoba economy is firing on all cylinders,” said Marie-Christine Bernard, associate director, Provincial Outlook.

Economic growth in the province is expected to top 3.7%, with Manitoba’s manufacturing sector withstanding the ravages of the soaring dollar. The province exports aircraft parts and transit buses.

Western growth remains the theme as Saskatchewan is expected to run a close second, with growth of 3.6%.

Much of this growth is fuelled by the strength of the resource sector, a familiar driver in western provinces. As the values of commodities rise, workers flood in from slower-growth provinces. This migration in turn fuels growth in the construction and service sectors.

The original boom-province, Alberta, seems to be cooling off, though, as drilling activity slumps to a five-year low. After several years of strong oil-related growth, the province is now seeing the service sector take over. Growth is expected to ring in at 3.3% for the year.

British Columbia will be the weakest province in the west but should still post growth of 3.1%, thanks to its strong internal economy.

Meanwhile, Ontario will continue to struggle with the impact that the dollar has on trade, with growth of just 2.1% expected. Quebec will do a little better, as it relies more on domestic consumption than Ontario does, and la belle province should see growth of 2.4%.

“In central Canada, the sombre U.S. outlook will present a challenge for both Ontario and Quebec, but neither province is expected to slide into a recession,” says Bernard.

The Atlantic provinces will see a mixed bag. Nova Scotia will fare well with growth of 2.6%, while New Brunswick’s mining and construction industries will help that province to 2.2% growth. Prince Edward Island will lag, with growth of just 1.9%.

Newfoundland will not be able to repeat the stunning 7.3% growth it posted in 2007 and will only manage a 1.5% increase in GDP, as oil production wanes.

Filed by Steven Lamb, Advisor.ca, steven.lamb@advisor.rogers.com