(March 15 – 11:15 ET) – Every provincial economy will experience reduced growth in 2001 but none will experience an outright recession, CIBC predicted today.

“It is difficult to see how the provinces can repeat their strong performances of the last two years in 2001,” said chief economist Joshua Mendelsohn. “While all provinces will be hurt by the U.S. weakness, the manufacturing centres of Ontario and Quebec are most likely to be affected. The energy-producing provinces are not expected to experience the same slowdown in orders.”

Provincial growth rates in 2001 will range from a high of 4.5% for Alberta, to a low of 2.5% for Manitoba, New Brunswick, Nova Scotia and PEI. “While this is a significant reduction in many cases from the experience in 2000, it is still a very respectable performance,” Mendelsohn said.

“While 2001 is set to be a slower year than 2000, particularly for Ontario and Quebec, growth is unlikely to retreat to recessionary levels,” said Alister Smith, deputy chief economist. “In fact we expect that the Canadian economy will achieve more modest but still healthy growth of 2.8% in 2001 and will bounce back strongly in 2002 to 3.5%,” he added.

Newfoundland will grow by 3% in 2001 and 4.5% in 2002, thanks to the booming energy sector.

The blocking of potato exports to the U.S. and the broader U.S. slowdown are hitting PEI, and will result in a decline in growth to 2.5% in 2001 before it picks up to 3.5% next year.

Slower growth is expected in Nova Scotia in 2001 as demand slows for Nova Scotia’s non-energy exports and the province maintains fiscal restraint. The persistence of high gas exports will offset this somewhat, ensuring moderate growth of 2.5% this year, rising to 3% in 2002 as capital expenditures on offshore development and exports to the U.S. rebound.

In New Brunswick, the completion of the Moncton-Fredericton highway and other projects, coupled with slower exports to the U.S., will reduce growth to 2.5% this year. In 2002, a rebound in demand for commodity exports should push growth to 3.5%.

Quebec’s economy will decelerate sharply as U.S demand declines. Growth is expected to fall to 2.7%. Demand for its regional jets, aircraft engines and specialized high-tech equipment should prove more resilient. Growth will bounce back to 3.5% in 2002.

Ontario’s economy will experience the sharpest slowdown of any of the provinces in 2001. The slowdown in autos and high technology got under way in the fourth quarter but likely have further to go. Economic growth in 2001 will drop to 2.7% before rebounding to 3.5% next year.

Manitoba’s growth is likely to moderate to 2.5% in 2001 with softer U.S. demand for manufactured goods. Conditions will improve slightly in 2002 as the economy expands 2.8%.

In Saskatchewan, continuing high oil prices will help maintain export revenues in 2001 despite a fall in manufacturing and a tough time for grain farmers. Growth in 2001 will come in at 2.5%, rising to 3% in 2002.

Alberta’s good times appear likely to continue as oil and gas prices stay. Economic expansion will moderate a little to 4.5% in 2001 and 2002. A significant challenge for the province is finding enough skilled labour as unemployment averages 5% this year and 4.8% in 2002.

B.C.’s growth in 2001 is expected to slow slightly to 2.7% from 3% as a result of weak forest product exports, but strong energy markets. There should be a slight pickup in 2002 with growth reaching 3% again.