OTTAWA, May 14, 2015 /CNW/ - Lower prices for oil will lead to a sharp slowdown in Saskatoon's economy this year, according to The Conference Board of Canada's Metropolitan Outlook: Spring 2015.
"A dramatic reversal of fortune will see long-standing growth leader Saskatoon near the bottom of the pack this year," said Alan Arcand, Associate Director, Centre for Municipal Studies. "Economic growth should pick up next year but remain modest by historical standards."
- Economic growth will cool considerably in Saskatoon, but the city will stave off a recession.
- Employment growth in Saskatoon is expected to slow to 0.6 per cent, the weakest gain since 2011.
- Hit hard by the slump in oil prices, the economies of Calgary and Edmonton are expected to shrink by 1.2 per cent and 0.8 per cent respectively.
Following gains exceeding 6 per cent in 5 of the past 6 years, economic growth in Saskatoon is forecast to slow to a 6-year low of 1.8 per cent in 2015. Real gross domestic product will expand at slightly faster 2.2 per cent rate next year.
Employment growth in the census metropolitan area (CMA) is expected to slow to 0.6 per cent, the weakest gain since 2011. This, along with faster labour force increases, will help ease the area's tight labour market.
Saskatoon's manufacturing, construction and services sectors can expect slower gains this year in line with the cooling economy. Local manufacturing output will expand by 2.5 per cent in 2015, down from average growth of just under 7 per cent annually between 2012 and 2014. Likewise, local construction output is set to slow to 2.2 per cent in 2015, as population increases ease in 2015, leading to lower demand for homes and a dip in housing starts.
Aside from Calgary, Edmonton, Saskatoon and Regina, most of the 13 CMAs covered in the report will see their economic fortunes improve this year, boosted by lower oil prices, a weaker Canadian dollar, and improvement in the U.S. economy. Toronto, Vancouver, and Halifax will be the fastest growing metropolitan economies in the country this year, with each posting growth of 3.1 per cent.
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SOURCE Conference Board of Canada
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