November 9, 2001
For immediate release
Release of the 2001 Progress Report on the Economy
"Available statistics for the first eight to nine months of 2001 indicate that the provincial economy was expanding in the 1.5 to 2 per cent growth range, in line with the forecast growth in the 2001 Budget," she said. "At the time of our last Budget, there was a great deal of uncertainty created by the US embargo on our potato exports, which was later removed. However, it is clear that the present global economic uncertainty, following the September terrorist attacks, has now weakened the situation for all economies."
Even before the September crisis, central bankers in the USA and Canada had steadily lowered interest rates to offset the fall in stock market values and moderate the deteriorating economic situation.
There is growing consensus that the Canadian economy is in a slight decline in the second half of 2001 and will likely show only weak improvement in the first half of 2002. For Prince Edward Island, growth of GDP of about 1 per cent in 2001 is now expected and compares to the latest national growth forecast of 1.5 per cent.
The Progress Report indicates that the slower growth of the provincial economy in 2001 contrasts with its rapid expansion in previous years. Between 1998 and 2000, provincial economic growth averaged 4.1 per cent. In 2000, employment grew at a record pace of 5.2 per cent. This compares to an annualized growth rate of 1.8 per cent in 2001. Notwithstanding the slower pace of growth, the Island's unemployment rate has continued to drop in 2001, averaging 11.8 per cent, compared to 12 per cent in 2000.
The rate of increase in consumer prices has also been considerably less in 2001, compared to 2000 when energy prices rose by nearly 30 per cent. Consumer spending has been relatively buoyant in 2001, and the province's retail sector continued to expand this year with several new major retail outlets opening. Total spending by tourists was also up, though the actual number of tourists was down slightly from 2000.
Ms. Mella concluded, "This Progress Report provides an extremely useful picture of how the Province of Prince Edward Island is performing in these uncertain times."
The 2001 Progress Report on the PEI Economy is available at Island Information Service, 11 Kent Street, (902) 368-4000, and on the provincial government Web site: www.gov.pe.ca