Low oil prices cut into growth, but other sectors expected to keep provincial economy growing
OTTAWA, Feb. 23, 2015 /CNW/ - Despite taking a hit from the collapse in oil prices, the Saskatchewan economy is expected to avoid a recession and grow by 0.8 per cent this year, according to The Conference Board of Canada's Provincial Outlook-Winter 2015.
"About $4 billion was invested in Saskatchewan's oil industry last year. With the decline in oil prices, the number of wells drilled will fall sharply, which will reduce investment and employment in the industry," said Marie-Christine Bernard, Associate Director, Provincial Forecast. "The provincial economy is not expected to go into decline, because industries such as potash and metal mining will be bright spots."
- The recent plunge in crude oil prices means that mineral fuel output in the province is forecast to contract by 8.1 percent in 2015.
- Growth prospects in metal mining and in potash are expected to be strong over the next few years.
- Following a difficult year in 2014, agriculture is forecast to make a comeback in 2015.
The recent plunge in crude oil prices means that mineral fuel output in the province is forecast to contract by 8.1 percent in 2015 and 2.8 per cent in 2016.
Growth prospects in metal mining and in potash are strong over the next few years, as increased global demand for uranium is expected to boost production. Non-metallic mining and quarrying has growth projections of 9.3 per cent in 2015 and 7.2 per cent in 2016.
Following a difficult year, agriculture is forecast to make a comeback in 2015. Growth in the agriculture sector is forecast to be 5.8 per cent this year. Manufacturing will face moderate growth over the next two years, while construction is set to grow in 2015.
Employment is expected to shrink modestly and the unemployment rate in the province is expected to rise to close to 5 per cent in 2015 (from 3.8 per cent last year).
After the subdued outlook for 2015, Saskatchewan's economy is expected to make a gain of 1.7 per cent in 2016. Oil prices are expected to gradually rise as the global oil supply glut eases and global demand improves.
The Conference Board of Canada will host a webinar, Canada's Fiscal and Economic Outlook: Small Winners, Bigger Losers, on March 13, 2015 11:00 AM EST.
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