OTTAWA, Oct. 17, 2017 /CNW/ - Winnipeg and Saskatoon can expect to see economic growth of 3.6 per cent each this year, while Regina's real GDP is forecast to rise 2.9 per cent in 2017, according to The Conference Board of Canada's Metropolitan Outlook: Autumn 2017.
"The worst appears to be over for Saskatoon and Regina. Both cities are benefiting from a modest firming in oil, potash, and crop prices," said Alan Arcand, Associate Director, Center for Municipal Studies. "Winnipeg's economy is also enjoying robust growth this year. But economic growth is projected to moderate in all three Prairie cities in 2018, with Winnipeg expected to experience the sharpest deceleration."
- Winnipeg's real GDP growth is expected to reach a solid 3.6 per cent this year, before slowing sharply to 1.4 per cent in 2018.
- Saskatoon's economy will see an increase of 3.6 per cent this year, although gains will throttle back to 2.0 per cent in 2018.
- Following two soft years, real GDP growth will hit 2.9 per cent in Regina in 2017 before moderating to 2.1 per cent in 2018.
- Calgary and Edmonton are forecast to be the fastest growing census metropolitan areas (CMAs) in Canada this year, with real GDP forecast to grow by 4.6 per cent and 3.9 per cent respectively.
Winnipeg's real GDP is on track to increase by 3.6 per cent in 2017—the strongest growth in almost 20 years. The local manufacturing sector continues to be buoyed by solid demand for transportation equipment, a low Canadian dollar and solid U.S. demand. At the same time, the construction sector is receiving a lift from robust residential demand and several major ongoing non-residential projects. Meanwhile, strong output growth on the services side is being led by wholesale and retail trade and by finance, insurance, and real estate.
Unfortunately, Winnipeg's economy is expected to lose steam next year, in line with much slower activity province-wide. In fact, the local economy is expected to grow by only 1.4 per cent in 2018. A decline in housing starts will take a bite out of activity in both construction and in finance, insurance, and real estate. Consumer spending will also slow in step with the overall economy, which will lead to sharply slower growth in wholesale and retail trade output. On a positive note, local manufacturing activity is expected to remain fairly healthy over the near term.
Despite the slower economy, local employers are expected to keep hiring. Job growth is forecast to reach 1.3 per cent in 2017 and 1.6 per cent in 2018.
Thanks to a gradual pick up in commodity prices, Saskatoon's economy is on the comeback trail and is set to expand 3.6 per cent GDP this year, signalling an end to a two-year recession. That said, this year's burst of growth appears unsustainable and so real GDP gains are forecast to throttle back to 2.0 per cent in 2018. Saskatoon's services-producing industries are collectively forecast to expand at a three-year high pace of 3.6 per cent in 2017, matching growth in the overall economy. The pickup comes thanks to an improved outlook in several industries, including in wholesale and retail trade and in business services.
Saskatoon's construction sector will start leveling off this year after contracting in the last two years. Despite a weak local commercial real estate market, two major office towers are planned for the city's downtown core and residential permit values are starting to pickup. In all, construction output is set to rise by nearly 1 per cent this year and a further 1.8 per cent in 2018. Meanwhile, the CMA's manufacturing sector is poised to expand by 1.8 per cent this year and 0.6 per cent in 2018, in line with a very gradual rise in commodity prices.
Healthier GDP growth should prove a tonic for the job market. Saskatoon's employment fell 0.7 per cent in 2016, the first dip in five years, but a 0.8 per cent increase is forecast for this year, to be followed by a stronger 1.4 per cent advance in 2018.
Regina's economy is poised to expand by 2.9 per cent this year, with growth moderating to 2.1 per cent in 2018. Leading the way this year is the manufacturing sector, as its output growth is poised to hit nearly 5 per cent. Stabilizing potash, oil, and crop prices have supported much of the growth as a significant portion of the local industry provides equipment for Saskatchewan's resource sector. The CMA's construction output is forecast to rise 0.9 per cent in 2017, following two straight annual contractions. This year's expansion is largely fuelled by ongoing work on a $1.9-billion bypass for the Trans-Canada Highway. On the residential side, a modest housing starts recovery is forecast this year, with housing starts reaching 1,860 units. However, the recovery will stall next year with starts forecast to fall back to about 1,760 units.
Regina's services output growth is set to improve, rising by 3.2 per cent in 2017. Continued employment and income gains, combined with a recovering economy, will lead to faster retail sales expansion. That, coupled with the bounce-bank in goods sector activity, will support an 11.0 per cent rebound in wholesale and retail trade growth this year. However, this pace is unsustainable and growth will slow in 2018.
Employment rose by just under 1 per cent in both 2015 and 2016, and more of the same is expected this year and next, with employment rising about 1 per cent each year.
Alan Arcand will present the outlooks for Saskatchewan and Saskatoon and Regina at a live webinar on November 8, 2017 at 02:00 PM EST.
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SOURCE Conference Board of Canada
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