Newfoundland and Labrador’s economy is predicted to shrink 0.4 per cent this year, according to a new report from the Atlantic Provinces Economic Council.
The council released its annual economic outlook for the Atlantic provinces in Saint John, N.B., today, predicting a mixed year ahead for the East Coast. While major project spending in the region is expected to decline, exports will benefit from “increased output in key sectors” next year, says the report.
The council lays the blame for Newfoundland and Labrador’s contraction on reduced oil production that offset increased capital investment in 2012. It’s the worst performance of the provinces in the report, with slow growth of one per cent forecast in 2012 for both Nova Scotia and New Brunswick, and 1.6 per cent in Prince Edward Island. Declining oil production due to maintenance this year has been a factor in all major economic forecasts this year, but most predicted slight growth for Newfoundland and Labrador. As late as September, RBC’s economic outlook predicted the province would grow 1.5 per cent in 2012.
However, the council’s report also predicts 2013 will see Newfoundland and Labrador have the strongest rebound thanks to recovering oil production and continued mining investment. The report forecasts growth of 3.4 per cent for the province next year, at least twice the rate of economic growth predicted for any of the Maritime provinces.
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