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Friday, November 25, 2005

Western Canada Leads Country

A recent study from TD Canada Trust (Regional Economic Outlook, published October 31, 2005) shows Alberta and the rest of western Canada ahead of central and eastern Canada in most economic indicators.

"The sizzling demand for workers in the energy sector and other areas such as mining, construction, and transportation has pushed down the unemployment rate in AB, BC, and SK to the lowest levels on record. In an effort to address shortages and attract labour from elsewhere in Canada, firms in Western Canada have offered more generous wage hikes. As a result, personal disposable income growth is running at rates well above the rest of the country and little change in this picture is expected in 2006."

"The recent shift in in job market momentum and inter-provincial in-migration to the west has been reflected in differences in housing market activity. Along with P.E.I., BC and AB are the only provinces where housing starts for 2005 are likely to surpass last year's levels. In 2006, residential production is expected to ease in all regions, dampened by rising interest rates and continued erosion in affordability. Despite the broad based decline, we anticipate residential construction will cool off to a lesser degree in Western markets. In fact, on a per capita basis housing starts in AB and BC will remain the strongest. Mirroring these homebuidling trends, the BC and AB resale housing market are on track to outperform the rest of the country in 2005, with prices soaring by a double digit pace in most cities. Next year, we expect increases in average home prices to moderate even in these two leading provinces, although a further outperformance compared to the national-average gain of 4% seems to be a good bet."

The complete report is available on the TD Canada Trust website at www.tdcanadatrust.ca

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