OTTAWA, Sept. 23, 2015 /CNW/ – Lower prices for oil and other resources will lead to a slowdown in Saskatoon's economy this year, according to The Conference Board of Canada's Metropolitan Outlook: Autumn 2015.
“Lower prices for many of Saskatchewan's key commodities, including oil, potash, uranium and wheat will push down economic growth in Saskatoon to its slowest pace since the 2009 recession,” said Alan Arcand, Associate Director, Centre for Municipal Studies. “Economic growth should improve next year but remain modest particularly compared to the previous five years .”
- Economic growth will cool considerably in Saskatoon to 1.7 per cent this year. The city's economy should enjoy a faster 2.6 per cent gain in 2016.
- Both the new and resale housing markets are oversupplied. Accordingly, Saskatoon housing starts are expected to decline by more than a quarter in 2015.
- Vancouver will be the fastest growing metropolitan economy in the country this year, while long-standing economic leaders Calgary and Edmonton face recession.
Following gains exceeding 6 per cent in 5 of the past 6 years, economic growth in Saskatoon is forecast to slow to 1.7 per cent in 2015. Real gross domestic product will expand at slightly faster 2.6 per cent rate next year.
The slowdown will be fairly broad-based, with a majority of sectors experiencing weaker growth. But one industry in particular will struggle: construction. Saskatoon's construction industry has stalled in the last two years and is slated to contract by 5.9 per cent this year. Both new and resale housing markets are oversupplied and housing starts are set to decline by more than a quarter this year to a five-year low of 2,500 units.
The manufacturing sector will be limited by softer resource and agriculture markets, as many of Saskatoon's manufacturers service those markets. Output growth is projected to slow to 2 per cent this year, down from 2.9 per cent the previous year.
Finally, all segments of the local services sector will see slower growth this year. The finance, insurance, and real estate sector will feel the effects of a cooling housing market, while the wholesale and retail trade industry will be hurt by softer consumer spending. At the same time, output growth in transportation and warehousing will cool sharply as the slowing economy reduces shipping needs. In all, Saskatoon's services sector is forecast to expand by 2.4 per cent this year, down from 3.9 per cent in 2014.
Of the 13 CMAs covered in the report, Vancouver will have the fastest growing metropolitan economy in 2015. Toronto, Winnipeg, Halifax, and Montréal round out the top five spots. These cities are all on track to post economic growth above 2 per cent. In contrast, long-standing economic leaders Calgary and Edmonton face recession.
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SOURCE Conference Board of Canada