TORONTO, March 15 /CNW/ - Canada's energy and mining sectors will again
tilt growth performances Westward in 2007, even as non-residential
construction and services-based activity remain relatively buoyant across the
nation, according to Scotia Economics' latest Provincial Trends report.
    "For the third year in a row, Canada is expected to post slower output
growth," says David Hamilton, Economist, Scotiabank. "Despite the continuing
solid gains in the country's resource-rich regions, manufacturing activity
remains under pressure from non-stop foreign competition, rising input costs
and a strong Canadian dollar. Meanwhile, deteriorating affordability, largely
due to higher prices, is expected to put a chill into the housing market.
    "Helping to pick up the slack, capital spending will provide solid
support," adds Mr. Hamilton. "Not restricted to energy- and mining-rich
provinces, such as Alberta's oil sands, Saskatchewan's uranium mines or
Newfoundland & Labrador's nickel mines and offshore oilfields, non-residential
construction will remain a key source of growth in such areas as public
infrastructure, sea and airport expansions and commercial building
developments, just to name a few."
    The spillover effect of construction activity should also benefit other
sectors. Services should remain robust, providing solid underlying support to
output growth, as well as employment opportunities.
    According to the report, strong labour demand and tight labour markets
are putting pressure on virtually all of the provinces. British Columbia and
Alberta are drawing workers westward in search of higher-paying job
opportunities, while the Atlantic region, as well as Manitoba and
Saskatchewan, will continue to be affected by inter-provincial out-migration,
which has been impeding growth.
    From a regional perspective, growth in the Western and Atlantic regions
should outpace the national average in 2007, while Central Canada lags behind.
Newfoundland & Labrador is expected to best the other provinces as its mining
sector recovers. A slowdown in non-residential construction will moderate
growth in Alberta and B.C., although the two provinces should remain at the
top of the pack. Ontario and Quebec will likely continue to face weakness in
manufacturing amid industry restructuring.

    Scotia Economics provides clients with in-depth research into the factors
shaping the outlook for Canada and the global economy, including macroeconomic
developments, currency and capital market trends, commodity and industry
performance, as well as monetary, fiscal and public policy issues.