SASKATOON, SASKATCHEWAN – Today, the Saskatoon Regional Economic Development Authority (SREDA) released two publications: the Q2-2018 Economic Dashboard for the Saskatoon Region and the Q3-2018 Consensus Economic Survey for Saskatchewan. The dashboard looks back at the previous quarter and tracks sixteen economic indicators for the Saskatoon Region, whereas the forecast looks forward provincially to projected economic growth for 2018 and 2019.
The figures from both reports suggest the Saskatoon Region economy is fairly stable overall, although provincial growth projections for 2018 have been reduced. For Q2-2018, SREDA has maintained a B- grade for the local economy.
Based on the Q3-2018 Consensus Economic Survey, SREDA is forecasting a 1.5 percent growth for Saskatchewan this year which represents a decrease of 0.5 percent from earlier projections. Looking into 2019, SREDA forecasts that Saskatchewan will grow at a rate of 1.8 percent, down from its previous forecast of 2.1 percent.
“Although our provincial growth forecast has been revised downward, not least due to ongoing challenges in the mining sector, we still see some growth, albeit it more moderate for the local economy as a whole in 2018,” said Alex Fallon, President and CEO, SREDA.
On a positive note, the Saskatoon Region continues to be a place people want to live, with population increasing 0.4 percent this quarter. Despite recent and significant job losses in the uranium sector, the labour market is showing signs of improvement with 4,100 net jobs created across all sectors so far this year, with particular seasonal gains in the agriculture and hospitality industries.
Seven reasons why the Saskatoon Region economy has shown signs of moderate growth:
- Local GDP growth: Q2 economic outlook for the Saskatoon Region is little changed from Q1. The local economy is expected to grow 2.0 percent in 2018 and a slightly faster 2.3 percent in 2019, following a 2.8 percent advance in 2017.
- Provincial GDP outlook: SREDA’s growth forecast for the province is for 1.5 percent growth in 2018, a downward revision from the previous quarter. Moving into 2019, SREDA forecasts a growth rate of 1.8 percent for Saskatchewan.
- Tapering population growth: The Saskatoon Region’s population grew an estimated 0.4 percent in Q2-2018, slightly softer than in Q1. At 2.8 percent, the Saskatoon Region was the fastest growing metropolitan area in 2017 but recent rise in inter-provincial migration to Alberta and BC appear to be tempering the trend.
- Job growth: The local economy added 2,433 jobs in Q2 but a concurrent increase in the labour force left the unemployment rate at 6.8 percent. Year-to-date, employment has increased by 4,100 net jobs.
- Slower construction activity: The number of new residential construction starts continues to lag as high inventory and unsold units dampen builder confidence. As of June, construction has begun on 616 single-detached and multi-unit homes, 17.3 percent lower than the first half of 2017.
- Still a buyers’ market: So far, existing home sales are down 7.6 percent, putting further pressure on prices in favour of buyers. Demand for new homes will continue to be impacted by tighter mortgage rules and anticipated increases in interest rates.
- #Saskatooning: Skyxe passenger traffic continue to track above historical average, buoyed in part by interest generated by tourism. In the first six months of 2018, Skyxe saw a 3.5 percent growth in passenger traffic, mostly domestic passengers (+5.6 percent).