Canadian provinces have avoided the difficulties associated with the European economic crisis, and are turning to resources for increased capital investment, according to Royal Bank of Canada’s Economics Provincial Outlook report for December.

Despite weakness earlier this year, economic growth is back on track across Canada at the provincial level, as the report indicates that increasing US demand will benefit growth in Ontario, Quebec, Manitoba, and most Atlantic Provinces.

RBC has made some adjustments to its 2011 growth forecasts to reflect the recent developments. While Saskatchewan continues to top the growth rankings (4.5 per cent), Newfoundland and Labrador (4.4 per cent) and Alberta (4.0 per cent) now follow more closely.

Manitoba (2.5 per cent), Prince Edward Island (2.2 per cent), British Columbia (2.1 per cent), and Ontario (2.0 per cent) remain near the national average of 2.3 per cent.

“The biggest differentiating factor for provincial growth next year will continue to be the dynamism of the natural resource sector,” said Craig Wright, senior vice-president and chief economist.

“Resources will continue to be a catalyst for increased capital investment and production in resource-heavy provinces like Saskatchewan, Alberta, and Newfoundland and Labrador,” he added. 

Local economies based on natural resources can provide strong growth opportunities for wealth management firms, as these economies often become hubs for financial services businesses specializing in meeting the needs of the professionals and businesses working in that sector. For example, the Texas energy sector creates a number of high net worth potential clients for the industry, and firms including BNY Mellon and Barclays Wealth have made hires in Dallas recently to strengthen their teams there. Meanwhile, Baird and Encore Bank both announced this year that they will expand with new offices in Texas.