Saskatchewan economy staying strong, says RBC Economics
By CNW Group Ltd.
By CNW Group Ltd.
Dec. 23, 2008 – According to the latest provincial economic outlook released today by RBC, Saskatchewan continues to carry strong momentum gathered during the commodities boom, that will help the province weather the global economic downturn.
According to the latest provincial economic outlook released today by
RBC, Saskatchewan continues to carry strong momentum gathered during
the commodities boom, that will help the province weather the global
"While not entirely immune to the global downturn, Saskatchewan's economy will power ahead at a rate of 3.5 per cent in 2008 and 2.8 per cent in 2009," said Craig Wright, senior vice-president and chief economist, RBC. "While these growth rates represent downward revisions to our previous forecast, the province is still expected to be the growth leader among all provinces over this period."
The report noted while commodity prices will be lower in 2009 relative to 2008, they are projected to remain at historically high levels, providing underlying support to income growth for the province. Furthermore, the RBC forecast expects that prices will remain sufficiently high enough that there will be no major pullback in capital spending on projects related to potash, uranium and petroleum.
So far in 2008, Saskatchewan's domestic demand has been strong with double-digit retail sales activity, rising new home prices and increasing housing starts. However, the main risk to the province's economic outlook is that a protracted downturn in the global economy will contribute to an even greater weakening in commodity prices, which could result in a major pullback in capital spending in the province.
The main theme of the RBC Provincial Outlook is that economic performance is expected to be weaker from coast to coast due to the widespread negative implications of the financial market crisis and the global economic downturn.
Ontario is expected to be worst hit with the province's economy contracting in both 2008 and 2009, for the first time since 1990-91. While growth will slow for all provinces, the economies of Saskatchewan and Manitoba will continue to lead during 2009.