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Thursday, May 15, 2008
Saskatchewan and Newfoundland and Labrador have stepped into a new era of prosperity, according to a study released today in the Canadian Economic Observer.
The ongoing commodity boom, starting in 2002, offered a unique opportunity for these two provinces to tap into their natural resources as never before. Driven by export growth, notably that of crude oil, Newfoundland and Labrador's economy led the nation in terms of growth in nominal gross domestic product (GDP) in 2007, at 13.4%. Saskatchewan followed with growth of 11.4%, ahead of Alberta's 8.3%.
Newfoundland and Labrador's growth in nominal GDP of 76% between 2002 and 2007 also topped Alberta's gain of 73%. Saskatchewan posted the third highest gain over the period, its GDP advancing 49%.
In terms of GDP per capita, Newfoundland and Labrador has registered the largest turnaround in one decade in Canadian history. In 1997, it was $10,000 below the Canada average, and as recently as 2005 it remained below-average. But in 2007, it jumped to $57,348, over $10,000 above the Canada average of $46,441.
Alberta ($74,825), Newfoundland and Labrador and Saskatchewan ($51,327) were the only three provinces where GDP per capita was above average in 2007.
Higher crude oil prices have been driving the boom in Newfoundland and Labrador and Saskatchewan. They are the top producers of crude petroleum in Canada after Alberta, accounting for almost one-third of Canada's production.
Newfoundland and Labrador's international exports soared 20% in 2007, the most rapid growth of any province. Between 2002 and 2007, exports doubled to reach $12 billion, as prices rose for Newfoundland and Labrador's energy products and metals.
In 2007, Saskatchewan exported $21 billion to other countries, a 13% increase over 2006. This placed Saskatchewan behind only Newfoundland and Labrador for the title of fastest growing provincial exports. In addition to crude oil, agricultural products, potash, and uranium have made major gains since 2005.
Perhaps most significantly, both Newfoundland and Labrador and Saskatchewan have reversed their long-term trend of a declining population. In the last two quarters of 2007, the number of people moving into Newfoundland and Labrador was the highest that it had been in 30 years. At the same time, out-migration slowed, resulting in the population increasing for the first time in 15 years.
Saskatchewan's population grew 0.8% in 2007, its first increase in over a decade, which put the population once again to 1 million. Moreover, the population of the 15 and over age group in Saskatchewan in April 2008 was 2.0% larger than it was in April 2007. This was just slightly slower than the 2.2% year-over-year increase in Alberta.
As incomes have risen and population growth has resumed, Newfoundland and Labrador and Saskatchewan consumers have gone on a buying binge, leading provincial growth in retail, housing and auto sales.
The study, "From lagging to leading: Newfoundland and Saskatchewan dig into the resource boom", is included in the May 2008 Internet edition of Canadian Economic Observer, Vol. 21, no. 5 (11-010-XWB, free), now available from the Publications module of our website. The monthly paper version of Canadian Economic Observer, Vol. 21, no. 5 (11-010-XPB, $25/$243), will be available on May 22.
For more information about the Canadian Economic Observer, click on our banner ad from the Publications module of our website.
For more information, or to enquire about the concepts, methods or data quality of this release, contact Diana Wyman (613-951-4181; firstname.lastname@example.org), Current Economic Analysis Division.[an error occurred while processing this directive]