OTTAWA, Nov. 14, 2016 /CNW/ - Saskatoon and Regina are bouncing back from last year's mild recession, but growth this year and next will be modest, according to The Conference Board of Canada's Metropolitan Outlook: Autumn 2016.
"Ongoing weakness in oil, potash, and agricultural markets has weighed on Saskatchewan and its two biggest cities, but the worst is now over," said Alan Arcand, Associate Director, Centre for Municipal Studies, The Conference Board of Canada. "The modest economic growth seen in both Saskatoon and Regina this year is expected to be followed by slightly stronger gains in 2017, although growth will remain well below pre-recession levels."
- Saskatoon's real GDP is forecast to rise 1.7 per cent in 2016 and 2 per cent in 2017, following a 0.4 per cent dip in 2015.
- Regina's real GDP will advance by 1.3 per cent in 2016, and slightly stronger growth of 1.8 per cent is on tap for 2017.
- Vancouver is expected to have the fastest-growing metropolitan economy this year and next, with growth of 4 per cent and 2.8 per cent, respectively.
Saskatoon's economy is projected to expand by 1.7 per cent in 2016, with stronger growth of 2 per cent forecast for 2017. Gains in the services-producing industries will outpace those among the goods sector. Led by growth in transportation and warehousing and wholesale and retail trade, Saskatoon's services-producing industries are forecast to expand 2.3 per cent this year and 2.1 per cent in 2017. Meanwhile, local construction output is set to expand by 2.7 per cent this year and 1 per cent in 2017, as non-residential building activity helps offset soft residential demand. On the other hand, the metro area's largest industry—resources and utilities—is on track to post fairly flat output growth this year, though an acceleration to 2 per cent growth is our call for next year. At the same time, manufacturing output is poised to decline for a third straight year in 2016, as the sector continues to feel the pinch of weak demand from the province's resources industries. However, we expect manufacturing to bounce back next year, in line with the improving fortunes of the resources sector.
Employment in Saskatoon will retreat fractionally this year before rising 2.2 per cent in 2017. The unemployment rate is expected to increase to 6.3 per cent in 2016 from 5.8 per cent last year.
Following a 0.5 per cent contraction last year, Regina's real GDP will advance 1.3 per cent in 2016, with slightly stronger growth of 1.8 per cent on tap for 2017. A drop in resources and utilities output will be this year's biggest drag on growth, although a turnaround is expected in 2017. Fortunately, Regina's manufacturing sector is on the mend, on track to expand 1.2 per cent this year and 2 per cent in 2017. Local manufacturing is benefiting from rising sales of food and chemicals, wood products, and machinery manufacturing. Regina's construction output is also forecast to bounce back from an 18.2 per cent drop in 2015 to an increase of 2.3 per cent this year, thanks to a number of non-residential projects, including the new football stadium. The services sector is forecast to rise by an average of only 1.5 per cent per year this year and next. In 2016, a rebound in retail sales is being offset by weakness in finance, insurance and real estate, and in public administration.
The modest economic expansion will keep job growth subdued in both 2016 and 2017. This will lift the local unemployment rate from 4.4 per cent in 2015 to 5.2 per cent in 2017.
Vancouver is expected to boast the fastest-growing metropolitan economy this year and next, among the 13 metro areas covered in this edition of the Metropolitan Outlook. At the other end of the spectrum, the economies of Calgary and Edmonton are expected to contract for a second year in a row in 2016, before rebounding modestly next year.
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SOURCE Conference Board of Canada
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