TORONTO, Dec. 12, 2013 /CNW/ - A solid grain and oilseed harvest this
year will boost Saskatchewan's GDP growth to 3.9 per cent in 2013, up
from an earlier-estimated 2.7 per cent, according to the latest RBC Economics Provincial Outlook released today.
"Saskatchewan's three biggest crops - wheat, barley and canola - have
played a large role in provincial growth this year with November
estimates pointing to an increase of around 42 per cent," said Craig
Wright, senior vice-president and chief economist, RBC. "This level of
agricultural output will be hard to sustain through 2014, which is the
main factor in our downward revision of the provincial economic growth
prospects for next year."
RBC projects Saskatchewan's real GDP to grow 2.1 per cent in 2014, down
from 2.7 per cent previously forecasted. RBC anticipates GDP growth to
be generally maintained in 2015 at 2.5 per cent.
"In addition to strong agricultural output, Saskatchewan's economy will
continue to benefit from strong job growth and the lowest provincial
unemployment levels across Canada," said Wright. "The real wildcard in
the outlook for the province is what will happen to both potash
production and capital spending within this sector."
The RBC report notes that uncertainty continues to linger around the
future of the potash sector with news breaking this past summer of an
overseas producer attempting to acquire greater market share,
particularly within emerging economies. In response to these
developments, Potash Corporation of Saskatchewan announced plans to cut
both its workforce, including approximately 440 layoffs in
Saskatchewan, and production capacity, including suspending activity in
two Saskatchewan mills.
"We still expect an overall increase of 10 per cent for potash output in
2013 on whole given the strong output in the first half of the year,
but we are assuming sharply lower activity in 2014 and 2015," said
RBC says that the direct hit to economic prospects from potash is not
only through production, but also through capital spending. Statistics
Canada's February 2014 survey of private- and public-investment
intentions will provide more guidance on the future of investment
spending within the mining sector in response to the overseas
developments, as well as capital expenditures in other sectors.
The RBC Economics Provincial outlook assesses the provinces according to
economic growth, employment growth, unemployment rates, retail sales,
housing starts and consumer price indices. The full report and
provincial details are available online as of 8 a.m. ET today at rbc.com/economics/economic-reports/provincial-economic-forecasts.html.
For further information:
Craig Wright, Senior Vice-President and Chief Economist, RBC, 416 974-7457
Paul Ferley, Assistant Chief Economist, RBC, 416 974-6192
Elyse Lalonde, Manager, Communications, RBC Capital Markets, 416 842-5635