RBC Economics' latest forecast for provincial economies has Newfoundland and Labrador looking at growth of just one half of one percent in 2008 and one percent in 2009.
It won't take much to turn that into a recession for one or two years in an economy that just a couple of years ago was starting to fire strongly on all cylinders.
On the upside, RBC expects things will start improving again some time after 2010.
Production is sharply weakening at Hibernia but remains on track at Terra Nova,
White Rose and Voisey’s Bay. Because of these projects, exports of energy and
industrial goods (which include key commodities such as iron ore and nickel)
now account for about three-quarters of the province’s total exports. Recent
approval for a sizeable production increase at White Rose is an added support.
While Newfoundland may well become a “have” province in 2009, it will take
several years before it stands another chance at posting province-leading growth
rates. The go-ahead is now in line for Hebron to start construction in 2010 and
production by 2013. There is the potential for construction of a second major oil
refinery at Placentia Bay, which would also coincide with the rough timelines on
the development of Hibernia South and the Lower Churchill hydro project.
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