The Atlantic provinces are expected to post solid economic gains in 2007, but the west remains the fastest growing region in Canada, according to the Conference Board of Canada.

“While most of the provinces will perform well this year, weakness in Central Canada will persist due to the troubles in the manufacturing sector,” said Marie-Christine Bernard, associate director, Provincial Outlook.

“Still, every province is forecast to post a surplus in 2007, giving provincial governments room to manoeuvre on their fiscal plans. Quebec, British Columbia, Manitoba and Newfoundland and Labrador are providing tax breaks and payouts to individuals, and most other provinces are targeting their spending on infrastructure.”

Newfoundland and Labrador is forecast to post growth of 6.4% this year, leading all provinces. This year’s growth is fuelled primarily by increased mineral output, which is expected to fall off in 2008. As a result, real gross domestic product is forecast to grow by just 0.9% next year.

Alberta’s economy is still hot, but diminished drilling activity in recent months — and weaker disposable income gains for residents compared to last year — will cause real GDP growth to ease to a more sustainable 4.1% in 2007.

A continued construction boom and strong gains in the primary sector will boost Manitoba’s real GDP growth to 3.6% in 2007.

Saskatchewan’s primary sector — specifically agricultural and potash production — has a more favourable outlook in 2007 than in recent years. Combined with a strong domestic economy, real GDP growth is expected to reach 3.2% this year.

British Columbia has turned into a job-creation machine, and steady gains in both services and goods producing sectors will lead to growth of 3.1% in 2007.

Ongoing mega-projects in New Brunswick’s construction sector, along with a resurgent mining industry and healthy consumer demand, will propel growth in real GDP to 3.1% this year.

Nova Scotia’s service sector will bolster the economy in 2007. Thanks to improved labour markets, solid income gains and new financial services will lead real GDP growth to 2.4%. The services sector will also set the pace for economic expansion in Prince Edward Island. Stronger consumer spending and government investment will help boost real GDP growth to 2.3%.

Provincial tax relief and a retroactive pay equity settlement will prop up consumer demand in Quebec. Still, Quebec’s manufacturing sector is being eroded by energy costs, global competition and the strong Canadian dollar. As a result, real GDP growth will be limited to 2.5% in 2007.

Ontario will have to wait until later in 2007 and into 2008 for a stronger outlook. The ongoing challenges in the industrial sector are holding growth in real GDP to 2% in 2007.