08 October 2008

The imaginary bubble

From RBC Economics' latest provincial forecast for Newfoundland and Labrador:

While domestic conditions are generally strong, growth in the economy is nonetheless expected to slow significantly relative to last year amid a leveling off in oil production. In 2007, the return to full operation of the Terra Nova offshore project and the completion of White Rose’s expansion have boosted crude oil
output by more than 20%. With no such increase this year, the contribution of the energy sector to provincial growth is likely to be flat or slightly negative.

Through the first six months of this year, crude oil production was down almost 9% year-over-year. All things considered, real growth in Newfoundland & Labrador’s real GDP is forecast to be negligible this year at 0.2% before picking up in 2009 to around 1.3% on the continued strength of the domestic economy.

Get that?

-  Oil production down by 9%  for the first half of 2008 compared to the same period in 2007.

-  Growth in real GDP at 0.2% in 2008 and only 1.2% in 2009.

Look at the whole report to get the full picture.