Newfoundland and Labrador is set to lead the Atlantic provinces in growth in the coming year.

Newfoundland and Labrador Economic Outlook for 2012

The province ranks among Canada's top provinces in economic growth with a 3.6 per cent rate generated by the province's booming minerals sector and high levels of non-residential investments.

However, Craig Wright, senior vice-president and chief economist, RBC, points out that Newfoundland and Labrador are subject to significant volatility because of their reliance on natural resources.

With refinery operations to resume and the next phase of the Hibernia Southern extension to begin, economists expectto see an improvement in energy exports from this region later this year.

In the near term though, declining output from mature oilfields in the province will reduce energy production in 2012 to yield a slower growth of one per cent in 2012. RBC also predicts that ongoing levels of investment in natural resources and related boosts in income will lead tomany years of solid economic performance ahead.

Outlook in other Atlantic provinces

The outlook for the rest of the Atlantic provinces is not quite so optimistic.

While PEI's economy is projected to hover around the 2.0 growth mark, both Nova Scotia and New Brunswick are forecast to experience lower than 2.0 per cent annual growth.

This is largely due to lower energy production, cuts in major public spending, and slower growth in demand from the U.S. and other provinces.

Although economic growth in the Atlantic provinces is likely to be quite weak this year, 2012 and beyond could look better.

Demand from the developing world is expected to keep resource prices relatively firm, while a recovery in the U.S. economy is expected to increase foreign demand for New Brunswick's products.

Canadian economy: national & provincial economic forecasts

Despite economic uncertainty worldwide, Canada's outlook for 2012 looks postive
Western Canada Economic Growth Forecasts
Ontario & Quebec Economic Growth Forecasts
Atlantic Canada Economic Growth Forecasts

Further reading

RBC Economic and Financial Market Outlook. View the full study: http://www.rbc.com/newsroom/pdf/fcst-09-2011.pdf

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