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Western Canada Economic Growth Forecasts for 2012

By Linda Plater |

Western Canada has good projected growth rates in 2012, with Saskatchewan expected to lead the way.

2011 A Golden Age For Saskatchewan's Economy

With global prices for grains and oilseeds up by 40 to 50 per cent compared to mid-year last year combined with favourable weather conditions this summer,  Saskatchewan yielded a considerably better second quarter in agricultural and potash production.

Its three largest crop harvests are estimated to likely be up 20 per cent this year compared to 2010 according to Craig Wright, senior vice-president and chief economist, RBC.

"As agricultural producers in other major growing regions attempt to boost output to capitalize on higher prices, demand and prices for potash have also increased."

This makes Saskatchewan the provincial leader in economic growth through to 2012; its GDP forecast to grow 4.3 per cent in 2011 and 4.1 per cent in 2012.

Alberta Powerhouse of Growth

With May's forest fires extinguished, Alberta is set to grow at a rate of 3.7 per cent in 2011, and 3.9 per cent in 2012, Canada's second strongest provincial economy.

Oil sands and energy-related sectors continue to bolster Alberta's growth with producers slated to spend more than 24 billion dollars in 2011, an 18 per cent increase over 2010. 

Good news: More than 77,000 jobs were added to the Alberta economy in the first eight months of this year, marking it as the strongest gain ever recorded over this period in the province.

And Alberta's red-hot energy sector has significantly contributed to provincial government revenues - the provincial deficit projection was slashed in fiscal 2011 by 2.1 billion dollars to 1.3 billion, which may allow the government to move to a balanced budget earlier than planned.

High Water and Hope:  Manitoba's Growth Outlook

Flooding and wet soil dampened chances for Manitoba's agricultural production with wheat and canola down by more than 20 per cent this year after a close to 10 per cent drop in 2010.

On a brighter note, data for manufacturing from the first half of 2011 suggests close to 10 per cent growth in this sector as a result of  increasing production in machinery and chemicals. Expectations of  a strengthening  U.S. economy suggests a  reverse in recent economic weaknesses in the province.

An expected return to more favourable growing conditions in 2012 combined with  recovery in agricultural production led RBC to boost Manitoba's  2012 forecast growth to 3.5 per cent  - which is higher than the national average in both years.

BC - Looks to the Far East

British Columbia's economic future appears to depend  less on the U.S. market and more on non-traditional markets such as China, Taiwan and South Korea, all posting over a 30 per cent increase to exports to these countries.

While international exports primarily natural resources advanced by nearly 14 per cent, RBC economists attribute weak retail spending in the province to a  projected decline in growth rate of  2.1 per cent in 2011 and 2.3 per cent in 2012.

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:

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