Prairie economic U-turn in 2010: Laurentian
Canada's three Prairie provinces will help push the country's overall economy into the black, says a report published Wednesday.
Montreal-based Laurentian Bank Securities said Alberta, Saskatchewan and Manitoba all have sufficient sector diversification to ensure that their economies will benefit as global GDP begins expanding again.
"Saskatchewan and Manitoba are breezing through the economic and financial crisis with an ease that must make other regions envious," wrote Sébastien Lavoie, a Laurentian Bank economist, in the 11-page report.
"We (also) believe that Alberta’s economy will bounce back slightly stronger than British Columbia’s during 2010," he said.
Laurentian's forecast is similar to other prognostications in which Canada is viewed as on the cusp of a modest economic recovery.
After contracting by 2.5 per cent in 2009, Canada's gross domestic product should expand by 1.9 per cent in the ensuing 12 months.
The country's national growth hiatus in 2008 and 2009 has been exacerbated by woes in central Canada, mainly an Ontario car sector and manufacturing industries in that province and Quebec that ground to a halt, Lavoie said.
During the almost-reached recovery stage, however, Canada will not see a return to growth for the goods-makers, he said.
"The central Canadian manufacturing-export sector is unlikely to return to 'normal' anytime soon, due to the rebalancing currently underway in global demand. Quebec and Ontario businesses will be unable to count on the combination of a weak Canadian currency and excessive U.S. consumerism to stir demand for their products," Lavoie opined.
Instead, Canadians will be looking west for their economic salvation, the Laurentian report said.
Manitoba managed to avoid a recession altogether as that province likely will see GDP expand 0.3 per cent in 2009 while Saskatchewan will experience a decline of 0.3 per cent in the same year.
|Average GDP growth (%)||2009||2010|
|Que. & Ont.||-2.6||1.6|
|Alta., Man., Sask.||-1.0||2.5|
|Source: Calculated from Laurentian Bank numbers|
Historically high commodity prices plus decent provincial domestic demand combined to assist the two economies to maintain their economic footing in 2009, Laurentian said.
By contrast, Alberta took a pounding as oil prices, at an all-time high in mid-2008, fell to less than 50 per cent of that level within a year. The economy of Canada's main oil and gas pumping province likely will contract by 3.1 per cent, highly than the national shrinkage of 2.5 per cent.
But, in 2010, Alberta should be the second fastest growing province, at 2.5 per cent. Higher oil prices, inching above $70 US a barrel and improved demand for natural gas and Alberta's foodstuffs should drive the province's growth train, Lavoie said.