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Statistics Canada finds more growth in Saskatchewan, Newfoundland, and Manitoba

05/27/2011 by John Clinkard

It appears that Statistics Canada has had second thoughts about economic growth in the provinces in 2010.

In a recent release, the agency indicated that it had used “incorrect weights” to estimate each province’s total output. Based on revised weights, the agency recalculated its 2010 growth estimates in all ten provinces.

However, it really only made significant changes to the year-over-year change of gross domestic product in three. Based on revised, hopefully correct weights, Saskatchewan’s GDP growth in 2010 was revised from a rather pathetic 1.4% to a much more respectable 4.4%.

Newfoundland and Labrador saw its growth rate jump from 4.8% to 6.0%, the fastest in the country, while in Manitoba, growth in 2010 was recalculated at 2.0% compared to the previous estimate of 1.4%.

Statistics Canada only revised its estimate of 2010 GDP growth lower in two provinces: Alberta, from 4.0% to 3.8%, and in Nova Scotia, from 2.3% to 2.1%.

Reviewing the overall pattern of provincial GDP growth in 2010, it is worth noting that the provinces with the strongest growth all benefitted from increased demand from the U.S. and abroad for petroleum, gas and industrial materials.

Looking forward, the four provinces (Newfoundland and Labrador, Saskatchewan, British Columbia and Alberta) that benefitted from the surge in global demand for resources in 2010 will probably continue to outpace the rest of the country in 2011 and 2012.

This being said, growth in Newfoundland and Labrador will probably moderate to a more sustainable 4% to 5% following its unsustainably strong gain of 6% in 2010.

In Central Canada, growth in Ontario should continue to be driven by strength in goods production together with an improvement in services. In Quebec, a pickup in business non-residential construction should offset a more moderate pattern of growth of residential building.

Although the persistent strength of the Canadian dollar versus the U.S. currency will continue to put a damper on growth in the Atlantic provinces (excluding Newfoundland and Labrador), they should continue to benefit from the sustained growth of residential construction, a modest strengthening in business non-residential building and the growth of external demand resulting from a steady expansion of U.S. and global economic activity.

Gross domestic product (GDP) growth - Canada and provinces
Gross domestic product (GDP) growth - Canada and provinces
Data Source: Statistics Canada/Chart and forecasts: Reed Construction Data, CanaData.

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