Diverse resource and agricultural sectors will support Saskatchewan’s economy, says a BMO report.
A record year for crops in 2013 fertilized real GDP, which grew by 4.8%. This year, predictions call for an average-sized crop, so real GDP should settle to the more typical level of 2.4%.
Last year’s crop was nearly 40% bigger than 2012, for a record 38.4 million tonnes, says Robert Kavcic, a senior economist at BMO Capital Markets.
“Although this will be challenging to repeat in the year ahead, the agriculture sector remains a key sector in the region,” he adds.
Saskatchewan’s jobless rate is the lowest in Canada, and employment will continue to grow. Private sector jobs are up 4.9% year-over-year.
The great economy is attracting new residents, who are in turn prompting a construction boom.
“We are seeing new construction for transportation, universities, hospitals and schools, with corresponding benefits for trades and engineering firms says John MacAuley, BMO’s Prairie and Central Canada vice president. “Construction in residential areas also remains solid, in part because of the influx of new residents.”
And the oil sector is expanding. It now accounts for roughly 20% of the province’s real GDP, while the Saskatchewan government gets 13% of its revenue from direct royalties.