Real GDP growth will decelerate in all 10 provinces this year, then rebound in 2002, according to the latest Provincial Outlook from The Conference Board of Canada.

“Growth will rebound from the second quarter onward,” said Mario Lefebvre, associate director of the Conference Board’s Provincial Outlook. “Tax cuts and a significant reduction in interest rates will help provincial economies recover from the effects of slower U.S. demand.”

Alberta is expected to lead the way this year, thanks to a combination of tax cuts, high energy prices, and numerous construction projects. “Both the goods and services industries in Alberta are thriving,” Lefebvre added.

The Conference Board expects that provincial tax cuts and good job prospects will stimulate domestic demand in Quebec through the remainder of 2001.

The manufacturing sector in Ontario is hurting due to the U.S. slowdown, but domestic demand is still alive and is expected to help offset weaker exports.

Continued weakness in construction activity will dampen growth in Saskatchewan and the Maritimes this year.

In Manitoba, the construction and manufacturing sectors will rebound to support growth through the remainder of 2001.

Oil continues to be the focus in Newfoundland, where a delay in production in the Terra Nova project will result in slower growth for 2001, but very strong growth in 2002.

In British Columbia, weaker demand from the U.S. will curb exports, allowing for only modest growth this year.