MONTREAL, July 10, 2013 /CNW Telbec/ - In its most recent update on
economic developments in Canadian provinces, the LBS Economic
Research's Provincial Monitor confirms that the gap between resource-rich provinces and the others is
narrowing. This situation is likely due to difficult weather conditions
and the growing uncertainty with respect to pipeline capacity in
Alberta and Saskatchewan. The outlook for these two provinces has been
downgraded for 2013, while the one for Quebec and some of the Atlantic
Provinces have been revised slightly upward.
From a national perspective, LBS Economic Research is still expecting
real GDP to grow just 1.5% in 2013 and 2.2% in 2014. Different factors
will affect the provinces' economic growth in the next two years. First
of all, domestic demand will be curbed by a slowdown in residential
investment. Some provinces — British Columbia, Ontario and Quebec —
will be impacted more than others because of the persistent imbalances
in their respective markets. Moreover, a shift in consumer behaviour,
favouring savings over credit, will affect provinces where the personal
consumption share of GDP is greater (60% or higher) — more
specifically, in British Columbia, Ontario, Quebec and the Atlantic
Provinces. In addition, major investment projects in the Atlantic
Provinces will stimulate economic growth for several years to come. As
for support to economic growth by the provincial governments, it should
remain limited as most of them are tightening their belt to eliminate
budget deficits.
From a more global perspective, Canadian provinces' external sector will
continue to face challenges associated with the slowdown in China and
the recovery in the United States. Economic activity south of the
border is indeed gradually gaining momentum, with benefits for the
major exporting provinces to be more visible in 2014. At the same time,
the Canadian dollar will remain under par with its American
counterpart, as it has been the case since the beginning of the year.
This will help reinforce exporters' profit margins, which should, in
turn, stimulate investment and job creation. LBS Economic Research also
anticipates that the American real estate sector's recovery will gain
traction and continue to fuel demand for lumber and wood-derived
products in British Columbia, Quebec, New Brunswick.
Finally, the energy sector should continue to enjoy higher natural gas
prices throughout 2013, which will favour production in British
Columbia, Alberta and Nova Scotia. Moreover, despite the negative
impacts of flooding in southern Alberta on pipeline capacity, crude oil
and bitumen producers should reap the benefits of the recent increase
of Canadian prices for these resources vis-à-vis global prices.
However, uncertainties surrounding the future access of Canadian energy
resources to American and Asian markets are limiting producer price
growth and undermining the climate of confidence.
The full report, as well as an update of provincial economic forecasts,
is available on LBS Economic Research web site: http://www.vmbl.ca/Economics/16/ProvincialMonitor_June2013.pdf. For any question, contact Marie-Claude Guillotte, economist at
514 350-2925.
About Laurentian Bank Securities
Laurentian Bank Securities (LBS), is an integrated full-service
investment dealer, focusing on five lines of business. The well
respected Institutional Fixed Income division has a strong presence in
Government and Corporate underwritings, as well as in secondary
markets. In addition, the Institutional Equity division is solidly
established across the country and focuses on serving clients through
research, trading and investment banking in the small capitalization
sector. The fast-growing Retail division and Discount Brokerage
division currently serve clients through 16 offices in Quebec Ontario
and Manitoba. Furthermore, LBS' corresponding business provides
complete back office support to a wide range of customers.
SOURCE: Laurentian Bank of Canada
