Today, the Saskatoon Regional Economic Development Authority (SREDA) released its Quarter 1 2017 Economic Dashboard for the Saskatoon Region. Recent economic indicators have shown signs of stability and modest growth in the local economy.
“Our headline indicator, GDP, posted a 0.3% quarterly increase, and a 0.8% year-over-year increase. Key leading indicators showed signs of strength with New Business Licenses and Building Permits increasing 34% and 55% respectively from the previous quarter. Provincial Retail Sales and Wholesale Trade numbers were also up from 2016. These indicators point to an increasing level of confidence from business and consumers,” said Alex Fallon, President and CEO of SREDA.
SREDA rates the status of the local economy with a C+ grade, up from the C rating in Quarter 4 2016.
“Overall, Q1 2017 has been encouraging, and we remain optimistic for growth in the Saskatoon Region in the coming months. Based on these positive signs in Q1 2017, we have upgraded our rating from C to a C+,” said Fallon.
The dashboard includes recent economic indicators related to GDP, employment, housing, retail, business licenses and more. Quarter 1 highlights include positive results for GDP, new business licenses, building permits, retail sales and wholesale trade. On the downside, the Saskatoon Region’s unemployment rate sits at 7.2% compared to the national average of 6.7%.
“Based on the recently released 2016 Census data, Saskatoon CMA’s population increased to 295,095 people, a 12.5% increase in 5-year period. This robust population growth, although lower than Conference Board of Canada estimates, bodes well for consumer spending and demand over the long term,” said Fallon.
“There has been promising economic activity, especially as it relates to investment in the region, in the first quarter of 2017. Significant investments in manufacturing – particularly in the industrial and agricultural sectors – seem to indicate that there is confidence in the region. This is significant because this confidence is evident in both the short-term, but even more so in the long term, which should breed even more investor confidence looking ahead,” said Keith Moen, Executive Director of the North Saskatoon Business Association.
“Current inventory levels of just over 1,800 homes for sale in the Saskatoon market at the end of Q1 2017 is comparable to 2016. This elevated supply is resulting in a slightly downward pressure on pricing with a median price of $320,000, 3% below the five year average. It also appears that mortgage rule changes late last year are moving more entry level buyers from single family to multi-family units. This will help to liquidate some of this market that has been oversupplied recently,” said Jason Yochim, CEO of the Saskatoon Region Association of Realtors.
“After three consecutive years of rising vacancy, Saskatoon’s industrial market began to exhibit signs of stabilization in 2016. Through Q1 2017 it appears this year may develop into a period of recovery. Leasing activity increased in early 2017 and the sale of the former Hitachi building to Brandt Group of Companies has had a significant impact on the market. 2017 is also shaping to be an encouraging year as the majority of landlords have acknowledged current market conditions and have reduced rates, which have historically been some of the highest in Canada, to attract or retain tenants,” said Tom McClocklin, President and Managing Partner of Colliers International.
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