- Saskatchewan's economy is expected to bounce back from recession, with real GDP forecast to expand by 2 per cent in 2016.
- The construction sector will be the main driver of growth for the provincial economy over the next two years.
- Oil production in Saskatchewan will continue to decline over the next two years, falling by 2.8 per cent and 2.4 per cent in 2016 and 2017 respectively.
- British Columbia will have the fastest growing provincial economy from 2015 to 2017.
OTTAWA, Dec. 7, 2015 /CNW Telbec/ – Saskatchewan's economy will recover from recession in 2016 thanks to a rebound in non-residential construction. The province's real gross domestic product (GDP) is expected to contract by 1.1 per cent this year before advancing by 2 per cent in 2016, according to The Conference Board of Canada's latest Provincial Outlook.
“Due to the drop in crude oil prices and drought conditions over the summer months, Saskatchewan has had a tough year. However, the recession will be short-lived,” said Marie-Christine Bernard, Associate Director, Provincial Forecast, The Conference Board of Canada. “A big factor helping the provincial economy rebound next year will be solid growth in construction.”
Investments in power generation and the potash industry, as well as the public infrastructure program of the provincial government, will generate strong growth for the construction sector in Saskatchewan. Following a decline in 2015, the sector is forecast to expand by a solid 5.6 per cent in 2016.
Both potash and uranium mining have bright prospects over the next two years. While potash mining is still struggling with weak prices, production volumes are expected to increase next year and in 2017. The recent expansions at the Rocanville and Vanscoy mines will increase potash output. Meanwhile, uranium production is also set to ramp up thanks to the opening of the Cigar Lake uranium mine in 2014. However, the bright outlook for metal mining and non-metal mining will not be enough to offset difficulties in the oil and gas sector, which is expected to contract by 2.8 per cent in 2016. Oil prices are expected to recover slowly—keeping drilling activity depressed for the next two years.
The drought that hit parts of Saskatchewan resulted in poor yields for the agriculture sector. Next year, with more normal growing conditions, the sector is expected to see recovery-type growth of 10.4 per cent.
With the provincial economy expanding over the next two years, job creation will slowly improve. After essentially no job creation this year, employment will grow 0.6 per cent in 2016 and 1.2 per cent in 2017.
SOURCE Conference Board of Canada