N.L. to have highest GDP growth in 2013
The Telegram (St. John’s)
Mar 20 2013
Mar 20 2013
A new report from RBC forecasts Newfoundland and Labrador will have the largest GDP (gross domestic product) growth in Canada this year, thanks to rebounding oil production and energy investment.
RBC’s Economics Provincial Outlook, released Tuesday, forecasts GDP growth of 5.1 per cent in the province this year, on the back of an anticipated $4.7 billion in capital investment in 2013, up 83 per cent over last year.
RBC economist Laura Cooper said the positive growth outlook is also a recovery from a dip in oil production in 2012.
“Given that mining, oil and gas make up about 40 per cent of GDP, it will provide a significant lift to that economic activity,” she said. “But at the same time, with the release of the Public and Private Investment Intentions survey, which is released by Statistics Canada, it actually showed an 83 per cent increase in capital investment in the oil and gas sector for 2013, and that’s expected to reach a record high of $4.7 billion, and that’s already on top of substantial increases in the past two years. So that’s what inched up the outlook a little bit for 2013.”
Beyond 2013, growth will return to a more normal level since it won’t be compared to the depressed levels of last year, pointed out Cooper, but economic activity is expected to be strong.
“Given that we have the Hebron oilfield, the construction beginning on that, and the Lower Churchill hydroelectric project potentially going to begin construction, things like that will support employment growth in the province,” she said.
“We might see some maturation-related declines in terms of the oil, but that is likely to be offset, of course, by continued capital investment in that area.”