With the energy sector set to replace manufacturing as the most significant source of growth, Newfoundland & Labrador and Alberta will take the lead in economic performance in 2003, according to a new forecast from CIBC World Markets economists.

“This year’s geopolitical turmoil is only underscoring the importance of developing new energy sources closer to home,” said Warren Lovely, senior economist at CIBC World Markets.

Newfoundland & Labrador is headed for a 6.1% real GDP gain this year, and an ongoing wave of resource development will see it register a nation-leading 4.6% advance next year. Alberta’s energy developments will leave it not far behind, with 2003 growth of 3.9%.

“Alberta continues to attract in-migration and new housing demand with its very competitive tax regime” noted Lovely. Alberta, along with Saskatchewan, would also benefit if this year’s drought conditions are not repeated in the coming year.

CIBC World Markets predicts that Canada’s manufacturing heartland in Ontario and Quebec will bear most of a burden of a sluggish pace to the US economy over the next few quarters. Quebec looks to have been the big winner in 2002 as inventory restocking needs pushed factory production levels, but like Ontario, it will moderate to close to the national average 2.9% growth in 2003.

The provincial outlook from CIBC World Markets follows up on an earlier national forecast that called for a growth slowdown in Canada, as weaker export prospects and a diminished boost from inventory restocking offset a still-healthy domestic demand picture.