OTTAWA, May 28, 2015 /CNW/ - Saskatchewan's economy will feel the effects of the drop in oil-related activities in 2015. However, the province is not expected to fall into recession this year, as other industries will keep the economy growing, according to The Conference Board of Canada's Provincial Outlook: Spring 2015.
"With the oil sector an important part of the Saskatchewan economy, the province is feeling the impact of lower oil prices. The number of wells drilled was down this past winter, and capital expenditures in the energy sector are not expected to recover until 2017," said Marie-Christine Bernard, Associate Director, Provincial Forecast. "However, strength in potash and metal mining, as well as a rebound in the agriculture sector, will temper the impact of lower crude oil prices on Saskatchewan's economy."
- Saskatchewan's economy is expected to grow by a modest 0.9 per cent in 2015 but perform better next year, with growth of 2.1 per cent.
- Strength in potash and metal mining, as well as a rebound in the agriculture sector, will temper the impact of lower crude oil prices on Saskatchewan's economy.
- Saskatchewan's unemployment rate remains the lowest among the provinces.
The outlook for metal mining over the next few years is bright. Global demand for uranium will boost Saskatchewan's exports of the valuable commodity. The outlook for potash production is also bright, thanks to the clearing of railway backlogs, mine expansions, and developments in Russia. On the downside, mineral fuel production is expected to decline this year, leading to an overall contraction of 2.6 per cent in mining output. Mineral fuel output is expected to rebound next year, leading to growth in the overall mining sector.
Agriculture is expected to make a comeback this year. Following a difficult 2014, growth of 5.1 per cent is expected for 2015. Meanwhile, the manufacturing and services sectors are expected to see moderate growth over the next two years.
Although the province is expected to shed 1,420 jobs this year, employment is forecast to recover in 2016. The unemployment rate will rise to 4.6 per cent this year and stay there in 2016. Despite this increase, Saskatchewan's unemployment rate will remain the lowest among the provinces.
Overall, real GDP in Saskatchewan is expected to increase by a modest 0.9 per cent in 2015. The economy will pick up next year, with real GDP forecast to rise by 2.1 per cent.
As Alberta and Saskatchewan continue to struggle with the impact of lower oil prices, other provinces will lead the country in economic growth until the oil industry recovers. Growth is expected be the strongest in British Columbia, Manitoba, and Central Canada over the next two years.
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SOURCE Conference Board of Canada
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