Saskatchewan’s Economy Expected To Build Momentum In 2018
January 8, 2018
Economists* are largely optimistic about Saskatchewan’s growth prospect for this year. Real GDP growth is forecast to come in at 2.1% in 2018 after an estimated 2.0% rebound last year, and increase 1.9% in 2019.
This will bump up Saskatchewan to fourth position on the provincial economic growth leader-board in 2018, and second strongest growth next year. Saskatchewan ranked seventh last year.
The momentum is expected to be driven by ongoing recovery in potash production (buoyed by new delivery contracts with key customers in China and India), sustained oil prices (which is boosting capital spending in the energy sector), and a return to more normal growing condition for crops in 2018 and 2019.
On the downside, gains will be offset by weak construction activity (particularly in non-residential sector), further fiscal tightening (e.g., reversal of the 0.5% cut in corporate tax rate) and struggles in the uranium market.
In addition, household spending is expected to be held back by sluggish employment and wage growth, and rising interest rates.
*SREDA’s consensus economic forecasts are created by taking the mean average of a panel of six prominent independent forecasts (TD, RBC, BMO, CIBC, Scotiabank and the Conference Board of Canada). Empirical studies show that pooling forecasts increases forecast accuracy, especially because of high degree of uncertainty in recent times.