Sask. economy on solid footing
1 May 2013
BRUCE JOHNSTONE email@example.com
Demand for resources to increase
Saskatchewan should remain among the top economic performers in Canada for the foreseeable future because of its resource wealth, sustained population growth and diversified economy, according to a senior economist with the Conference Board of Canada.
“We’ve had a drastic change in the economy in this province,” Mario Lefebvre, director of municipal studies for the Ottawa-based economics research organization, told about 500 participants at the second annual Saskatchewan Real Estate Forum here Tuesday. “This is the new normal.’’
In the past 10 years, Saskatchewan’s economy has become less dependent on agriculture and more diversified, with potash mining and the energy sectors leading the way, Lefebvre said.
Saskatchewan is rich in resources and agricultural commodities, “for which demand will only continue to increase because I, like millions of people around the globe, will keep on eating.”
Economic growth, which fluctuated wildly from one year to the next in the 1990s and early 2000s, has consistently outperformed the national average for the last three years at two to three per cent growth.
Population growth, which was on average negative from 1987 to 2006, has been solidly above the national average for the past four years. Similarly, in-migration from other provinces and countries, which was negative from 1998 to 2006, has been positive for the past five years.
“On average, you’re at 1.5 per cent (annual population growth) or better; the national average is one to 1.1 per cent per year,’’ Lefebvre said.
“So you’ve been exceeding the national average in population growth and you’ve been doing it for a few years. And expect to continue to do it because this economy has a lot to offer.’’
In fact, Lefebvre said Saskatchewan is firmly entrenched as one of the country’s top three provincial economies, along with Alberta and Newfoundland and Labrador.
“You’re there. It is happening. It’s now and it’s your new reality.’’
While housing prices won’t “skyrocket’’ as they have for the past five years, Lefebvre doesn’t anticipate housing prices will fall dramatically in Saskatchewan either. Nor does he expect housing starts will fall below 4,000 as they did in 2005, 2006 and 2009; housing starts are expected to exceed 8,000 in 2013 and 7,000 in 2014.
Capital investment, which increased by more than 40 per cent in 2012 to about $20 billion, is expected to grow by nearly 30 per cent in 2013 and 20 per cent in 2014.
“Incredible investment on all fronts, not just energy, but non-energy, and nonresidential construction is solid in this economy as well.”
While agricultural production isn’t expected to grow substantially this year or next, the increased output in mining, goods and services sectors will more than make up for it, Lefebvre said.
“This highly diversified, strong domestic economy can offset a negative year on the agricultural front, if it was to happen.”
Both Regina and Saskatoon are expected to outperform larger eastern cities like Toronto, Ottawa, Quebec City and Montreal, in the 2014-17 forecast period, while Calgary and Edmonton will nudge them out in the West, he added.
via Prosperity Saskatchewan http://prosperitysaskatchewan.wordpress.com/2013/05/01/sask-economy-on-solid-footing/