BMO forecasts ‘Modest’ growth for Saskatchewan
- 7 Oct 2016
- The StarPhoenix
- BRUCE JOHNSTONE
‘Modest’ growth forecast for province
Saskatchewan’s economy is expected to grow a “modest” 0.5 per cent this year, partially reversing the 1.4 per cent decline in 2015, before rebounding to nearly two per cent growth in 2017, according to the latest economic forecast from BMO Financial Group.
What: The forecast is part of BMO’s Blue Book, a 26-page report on the regional economies of Canada’s 10 provinces. What’s up, what’s down: The oil sector is expected to retrench this year amid a much weaker price environment, with a projected five per cent decline in production. Other resource sectors are mixed, with potash production rising, but prices depressed. The farm sector is having a strong year in terms of crop production, but low prices globally are weighing on incomes. The labour market remains weak, with employment little-changed from three years ago. That has lifted the jobless rate above six per cent for the first time since the late 1990s, and stalled wage growth. Population growth remains historically elevated at 1.4 per cent year over year, but growth has softened over the past two years after peaking at around two per cent. The province is again losing migrants to other regions.
What it means: “Saskatchewan’s economy has been held back by the slide in oil prices, but to a much lesser extent than in neighbouring Alberta,’’ BMO said. “That two-year period of negative growth is a stark change for the province which saw real GDP growth average just under four per cent per year between 2010 and 2014, one of the strongest on the economic landscape. “Looking ahead, growth should improve closer to two per cent by 2017, but the rip-roaring pace of prior years will not likely be repeated.”