Economy 'slowing rapidly,' Atlantic provinces warned
Economic growth in the Maritimes will drop to a snail's pace next year, while a sharp drop in oil production will cause Newfoundland and Labrador's economy to shrink in 2009, an independent think-tank warned Monday.
The Atlantic Provinces Economic Council's annual outlook for the four provinces said the regional economy is "slowing rapidly" amid a global financial crisis.
"The Atlantic region is not immune to spillovers from these developments," APEC said in a statement.
The most serious hit will be in Newfoundland and Labrador in 2009, when APEC says gross domestic product will drop about three per cent. The Halifax-based think-tank said production in fields off Newfoundland's east coast will drop by more than 15 per cent next year.
APEC said Newfoundland and Labrador's real GDP growth in 2008 is barely being registered, at just 0.2 per cent "as buoyant consumer and investment spending is offset by lower oil output."
In Nova Scotia, growth this year is being pegged at 1.0 per cent. The council said "further increases in major project investment" will at least keep growth stable at 0.8 per cent in 2009, despite a drop in housing activity and consumer spending.
APEC said New Brunswick's growth is slowing down to 1.1 per cent this year, dragged down by lower exports. For 2009, growth of just 0.4 per cent is expected "as major project investment tails off, consumer spending slows and exports continue to struggle."
In Prince Edward Island, APEC expects to see a similar scenario. It said the island's economy is slowing to 1.1 per cent for this year, while growth will drop to 0.8 per cent next year.
"High potato prices will support farm incomes and government infrastructure spending will also underpin domestic spending," APEC said in a statement.
A full economic forecast is to be released Monday in Halifax, with similar presentations scheduled through the week in Saint John, Charlottetown and St. John's.
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