Moderate growth forecast in 2013
5 Apr 2013
Moderate growth forecast in 2013
Province’s jobless rate will stay low
Growth in Saskatchewan will slow in 2013, but will still be among the top performers in the country, says BMO chief economist Douglas Porter.
“We think we will see moderate growth this year and very low unemployment,” Porter said.
Real GDP is forecast to grow 2.4 per cent this year, down slightly from three per cent in 2012, with strong resource- sector activity helping to maintain above average growth.
Both Saskatoon and Regina economies should perform relatively well, fuelled by solid job prospects, above-average wages and affordable housing, says the latest BMO economic report.
Despite house sales declining in number, prices have still been going up, Porter said.
“What we are seeing in Regina and Saskatoon is fairly similar to what we are seeing in the rest of the country,” he said.
“In Saskatchewan it is a little bit more extreme. We have seen a slightly bigger drop in (number of) sales and yet prices, in Saskatoon’s case, have been up an average of about five per cent,” he said.
“And in Regina up almost 10 per cent from a year ago.”
But don’t expect to see increases like that this year.
“We do think both (Saskatoon and Regina) have tipped into buyers’ market territory,” Porter said.
“I don’t believe we will see outright declines, but certainly a slowdown.”
The province boasts the lowest unemployment rate in the country, and is the only provincial government projecting a surplus.
The report said employment growth rose nearly four per cent year-over-year in the latest three months — the fastest pace in Canada — and pulled the jobless rate below four per cent, the lowest it has been in more than four years.
Low unemployment, above-average wages and affordable living costs have made Saskatoon and Regina a hot destination for both interprovincial and international migrants, the report said.
“Saskatoon saw a record net inflow of nearly 6,000 people in 2011, and data at the provincial level suggest those flows picked up further in 2012,” according to the report.
That immigration will keep home builders busy to keep pace with a surging population.
The report said over the medium term, Saskatoon and Regina will likely see about 10,000 and 7,000 jobs created, respectively, by the end of 2016, keeping the unemployment rates around four per cent.
Nonresidential construction activity related to infrastructure is expected to be near record levels.
The combined value of nonresidential permits in the two cities was $836 million in the 12 months through January, near the highest on record, the report said.
“Almost every region in the country is in need of infrastructure upgrades, but not everyone can afford to do it,” Porter said.
“There will be some fiscal tightening in Alberta because of their budget deficit, but that is not the case in Saskatchewan.
“Saskatchewan is blessed with by the fact that it is the only province that is looking at budget surplus this year.”
The resource sector — mainly oil and potash — will also drive growth in the region, the report said.
via Prosperity Saskatchewan http://prosperitysaskatchewan.wordpress.com/2013/04/05/moderate-growth-forecast-in-2013/