July 31, 2006

Construction, commodities to keep Canada moving forward

TORONTO

Canada’s economic performance map is being fundamentally reshaped by concurrent booms in the resource and construction sectors, according to Scotia Economics’ latest report, Provincial Trends — Capitalizing on Canada’s Commodity Bonanza.

“Domestic activity is also benefiting from the ramping up of non-residential construction,” said Meny Grauman, economist, Scotiabank.

“This performance goes beyond the building requirements associated with the expansion of resource supplies, to include the multi-year surge in public and private sector infrastructure spending that is being underwritten by buoyant corporate and government revenues.”

“Domestic activity is benefiting from the ramping up of non-residential construction.”

Meny Grauman

Scotiabank

From a regional perspective, Canada’s growth performance will continue to be driven by the resource-rich provinces in both the west and the east.

The best performances will be in Alberta where the massive expansion of the Athabasca tar sands is advancing, in B.C. where the province’s varied energy and mining resources are being tapped alongside construction for the 2010 Olympics, and in Newfoundland and Labrador, where land and sea-based commodity ventures are building momentum.

In between, the Prairies and the Atlantic provinces will benefit from the economic spillover from their respective western and eastern counterparts, in addition to increasingly diversified provincial economies.

Central Canada, however, should remain in the relative slow lane of growth.

While Ontario’s advance will be paced by its larger and stronger service-related activities, and Quebec’s by ramped up energy-related investments, the large manufacturing sectors of both provinces face ongoing competitive challenges from lower-cost jurisdictions overseas and a strong Canadian dollar.

A softer housing market will also keep a lid on their respective performances.

DCN NEWS SERVICES

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