RBC says Saskatchewan economy has great long-run potential



    TORONTO, Jan. 11 /CNW/ - Saskatchewan's economy improved in 2007 with
growth peaking at over four per cent, but is expected to modestly soften in
2008 and 2009, according to the latest provincial economic outlook released
today by RBC.
    "The province's economic activity heated up in 2007 thanks to a sudden
influx of migrants, an improvement in the housing market and strength in
certain commodity prices like grains, oil, uranium and potash," said Craig
Wright, senior vice-president and chief economist, RBC. "The next decade
offers great potential if commodity prices cooperate and the province plays
its cards right by managing the risks of overheated housing and commodity
cycles."
    The surge in interprovincial migration helped push housing markets up
significantly last year. While strained housing affordability conditions
produced record prices, they will dampen demand going forward into 2008.
    "Diamond mining does not yet factor into our two-year forecast, but if
activity proceeds on schedule, it could really boost the province's economy by
decade's end," noted Wright.
    A variety of capital investments will also add economic support, such as
the potash expansion in Rocanville ($1.8 billion) and a uranium mine in
northern Saskatchewan ($400 million) that is slated to begin production early
next decade. Rounding out the trio of major project initiatives is the massive
Bakken formation that offers the potential for up to 100 billion barrels of
quality light sweet crude with about 10 to 15 per cent of that potentially
able to be extracted by conventional technology and significantly more through
horizontal drilling and hydraulic fracturing. This is in addition to other oil
production or prospects in place elsewhere in the province. "Diamonds,
uranium, and oil offer the potential for sustainable growth going forward,"
said Wright.
    Across Canada, Alberta leads all provinces with above-average economic
growth, followed by Saskatchewan and Nova Scotia. On the opposite end of the
scale, and showing a complete turnabout with its mega-projects now in
maturation, Newfoundland and Labrador is posting the slowest economic growth
rate of 0.5 per cent, and on its heels is P.E.I., as well as Quebec and
Ontario with its manufacturing woes. However, a more bullish outlook is in
store by the end of this decade for Newfoundland and Labrador, New Brunswick
and Nova Scotia.
    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.S.T., at
www.rbc.com/economics/market/pdf/provfcst.pdf), provincial forecast details
are as follows:

    
                       Real                Housing             Retail
                        GDP                 starts              sales

                                          Thousands
                  07     08     09     07     08     09     07     08     09
                  --     --     --     --     --     --     --     --     --
    NFLD.        9.0    0.5    1.0    2.5    2.2    1.9   10.0    6.0    2.0
    P.E.I.       1.9    1.2    1.4    0.7    0.6    0.5    9.1    4.5    3.7
    N.S.         2.4    3.0    3.5    4.8    4.5    4.1    4.4    4.9    6.5
    N.B.         2.5    2.5    2.6    4.1    3.8    3.4    6.7    4.5    4.0
    QUE.         1.9    1.7    2.5   49.4   46.9   40.4    4.4    4.0    4.1
    ONT.         1.7    1.4    2.6   68.1   66.2   60.2    3.9    3.5    4.7
    MAN.         3.4    3.1    2.5    5.7    5.7    5.0    9.0    5.3    3.4
    SASK.        4.6    3.8    3.3    5.9    6.1    4.5   12.2    8.5    6.5
    ALTA.        4.3    3.9    3.2   48.3   38.6   35.2    9.7    9.0    8.2
    B.C.         3.0    2.5    3.0   38.6   35.2   28.5    7.1    6.0    7.5
    CANADA       2.6    2.1    2.7    228    210    184    5.9    5.1    5.5


                     Employment              CPI

                  07     08     09     07     08     09
                  --     --     --     --     --     --
    NFLD.        0.7    0.1    0.3    1.5    1.0    1.2
    P.E.I.       1.3    0.4    0.2    1.8    1.3    1.6
    N.S.         1.3    1.8    2.0    1.9    1.1    2.0
    N.B.         1.9    1.7    0.9    2.0    1.2    1.6
    QUE.         2.2    1.2    0.9    1.6    1.1    1.6
    ONT.         1.6    1.0    1.1    1.9    1.0    1.7
    MAN.         1.5    1.2    1.5    2.2    1.7    1.6
    SASK.        2.3    1.6    0.8    3.0    2.4    2.4
    ALTA.        4.8    2.0    1.8    5.1    2.9    2.6
    B.C.         3.2    1.9    2.6    1.8    1.4    2.2
    CANADA       2.3    1.3    1.4    2.1    1.4    1.9
    





For further information:

For further information: Craig Wright, RBC Economics, (416) 974-7457;
Derek Holt, RBC Economics, (416) 974-6192; Amy Goldbloom, RBC Economics, (416)
974-0579; Jackie Braden, RBC Media Relations, (416) 974-2124


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