A new report predicts Saskatchewan will avoid recession and the provincial economy will grow by a modest 0.8 per cent this year, despite taking a hit from falling oil prices.
In its winter provincial outlook released Monday, the Conference Board of Canada says mineral fuel production in Saskatchewan is forecast to shrink by 8.1 per cent this year and 2.8 per cent in 2016.
However, the province’s economy will still see positive growth in 2015, as potash and metal mining will be bright spots and agriculture will rebound, the report said.
“Construction projects already underway will also contribute to tempering the effects of lower oil revenues and capital spending plans in 2015,” the Conference Board said. “The economy will do better in 2016, with growth expected to come in at 1.7 per cent.”
The Conference Board says increased global demand for uranium should boost production in Saskatchewan and increase prices. Non-metallic mining and quarrying, which includes the potash industry, is forecast to grow by 9.3 per cent this year and 7.2 per cent in 2016.
“Contributing to this bright outlook for Saskatchewan’s potash industry are mine expansions and the recent shutdown of a huge potash mine in Russia,” the Conference Board said.
After a difficult year, agriculture is expected to make a comeback in 2015, with growth of 5.8 per cent this year and 2.8 per cent in 2016.
“Manufacturing will see moderate growth over the next two years, while construction is set to grow at a healthy pace in 2015 but see only modest growth in 2016,” the Conference Board said. “The services sector is set to advance at a moderate pace over the next two years.”
Employment is expected to shrink by 4,250 or 0.7 per cent in 2015 but pick up again next year. The unemployment rate in the province is expected to rise to nearly five per cent this year from an average of 3.8 per cent in 2014. The jobless rate is forecast to decline to 4.5 per cent in 2016.
