Migration drives Saskatchewan's housing market and economy, says RBC Economics



    TORONTO, June 22 /CNW/ - Saskatchewan's economy is expected to grow
4 per cent in 2007, and 3.6 per cent next year, according to a provincial
economic outlook released today by RBC.
    "After 10 years of declining population, the province is enjoying its
largest migration surge in 25 years," said Craig Wright, vice-president and
chief economist, RBC. "It has sparked a sudden housing boom that can be seen
by increased construction activity, a massive pop in house prices particularly
in Saskatoon, and a lift to consumer spending."
    RBC said the related housing boom has left construction bottlenecks
across the province, with some builders reportedly halting new orders as
serviceable land approvals are struggling to keep up alongside shortages of
both labour and materials. It's far too early to call it a permanent shift in
migration, so the report notes that caution is warranted on the sustainability
of house price trends.
    Caution is equally warranted for early season crop forecasts. A normal
crop is expected, but in some parts of the province there are increased risks
as very wet conditions led to delayed planting, which in turn means that
farmers are hoping for a late frost in order to take advantage of higher grain
prices. Other indicators are more positive as farm cash receipts are higher
compared to last year. Potash production is up a whopping 64 per cent year
over year after being held back by contract disputes in 2006.
    Across Canada, Newfoundland and Labrador will be the provincial growth
leader in 2007 at 7.5 per cent before experiencing a dramatic pull back next
year, shifting the spotlight back onto the more sustainable growth in Western
Canada. Prince Edward Island and Ontario will be at the back of the pack, each
with growth rates just shy of two per cent this year.

    The RBC Economics Provincial Outlook assesses the provinces according to
economic growth, employment growth, unemployment rates, personal income
growth, retail sales, housing starts and the Consumer Price Index.
    According to the report (available online as of 8 a.m. E.D.T., at
www.rbc.com/economics/market/pdf/provfcst.pdf), provincial forecast details
are as follows:

    
                      Real GDP          Housing starts        Retail sales

                                          Thousands
                  06     07     08     06     07     08     06     07     08
                  --     --     --     --     --     --     --     --     --
    NFLD.        2.8    7.5    0.5    2.2    2.0    1.8    2.9    5.5    2.0
    P.E.I        2.0    1.9    1.7    0.7    0.6    0.6    4.1    4.5    3.7
    N.S.         1.1    2.4    2.3    4.9    4.5    4.4    6.3    3.1    3.3
    N.B.         2.6    2.5    2.6    4.1    3.8    3.7    5.5    3.9    4.0
    QUE.         1.7    2.1    2.6   47.9   42.1   39.6    4.5    4.7    4.8
    ONT.         1.9    1.9    2.7   73.4   63.9   60.0    4.0    3.5    4.9
    MAN.         3.3    3.0    3.2    5.0    5.3    4.4    5.8    6.1    6.0
    SASK.        0.4    4.0    3.6    3.7    4.6    3.9    5.9    7.4    6.0
    ALTA.        6.8    4.6    4.0   49.0   44.8   39.9   16.0    9.3    8.5
    B.C.         3.6    3.2    3.3   36.4   35.3   31.1    6.2    6.0    5.8
    CANADA       2.8    2.6    2.9    228    208    190    6.2    5.2    5.2

                     Employment              CPI

                  06     07     08     06     07     08
                  --     --     --     --     --     --
    NFLD.        0.7    1.2    0.1    1.8    2.0    1.4
    P.E.I        0.6    0.8    0.4    2.3    1.5    1.7
    N.S.        -0.3    1.1    0.3    2.0    1.4    1.3
    N.B.         1.4    0.8    0.4    1.7    1.5    1.4
    QUE.         1.3    2.0    0.9    1.7    2.3    1.8
    ONT.         1.5    1.3    1.0    1.8    2.1    2.1
    MAN.         1.2    1.1    0.9    2.0    2.3    2.5
    SASK.        1.7    3.0    1.0    2.1    3.5    2.8
    ALTA.        4.8    4.2    2.0    3.9    5.2    3.5
    B.C.         3.1    3.0    1.9    1.7    2.2    2.3
    CANADA       2.0    2.0    1.2    2.0    2.4    2.2
    





For further information:

For further information: Craig Wright, RBC Economics, (416) 974-7457;
Derek Holt, RBC Economics, (416) 974-6192; Jackie Braden, RBC Media Relations,
(416) 974-2124


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