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Saskatchewan Leads Canada In Growth


RBC Economic Provincial Outlook, December 2011

RBC Economics has revised their 2011 Provincial Outlook, and has Saskatchewan leading the Country with 4.5% GDP growth.


The future continues to appear bright for Saskatchewan, as RBC’s analysts predict that we will continue to lead the nation in 2012:

“Nevertheless, the biggest differentiating factor for provincial growth

next year will remain the dynamism of the natural resource sector. It will continue

to be a catalyst for increased capital investment and production in resource-

heavy provinces. Saskatchewan and Alberta—both heavily dependent on

natural resources—will, therefore, stay at the head of the pack in 2012.”


According to the report, we can expect more of the same for 2013:

“Looking ahead to 2013, we believe that key underlying economic factors that

will shape 2012—for instance, the strengthening in U.S. demand, continued vigour

in global commodity markets, and fiscal restraint will remain in place. In our

opinion, the continuation of such economic influences will support similar results

in terms of provincial growth relative to 2012.”


The report also indicates that we will see steady growth in the number of housing starts, which is a direct result of the strong economic growth and in-migration that is accompanying it:

“One area of notable underlying strength has been residential investment. We saw an

acceleration of activity in the third quarter of 2011 with housing starts rising to

their highest levels since the recession. Such vigour has prompted us to revise

our forecast upward for Saskatchewan housing starts for 2011 to 7,400 units and

for 2012 to 7,600 units. For 2013, we project an even stronger 7,900 units, which

would be the highest annual tally since 1979. Residential investment is clearly

benefiting from strong economic growth and the positive effect this is having on

in-migration. In the second quarter of 2011, the province saw the largest net inflow

of migrants, both inter-provincial and international, on record since 1971.”


The report also makes mention of the manufacturing and wholesale trade being on a roll, as well as the expected continuation of increased investment in the resource sector.


Saskatchewan will continue to grow at a pace considerably faster than the national average:

“Evidence of strong natural resource production, and robust business and residential

investment spending so far this year confirms that Saskatchewan continues to

be in the fast lane. The good news even extends to the agricultural sector where

grain production is rebounding solidly after a poor 2010 harvest. We believe that

these sectors will contribute to a growth rate of 4.5% in the provincial economy

in 2011. While the bounce in the grain harvest will wane in 2012 (assuming normal

weather conditions), the province will, nonetheless, maintain a rapid pace

next year, decelerating only modestly to 4.2%. With a global economy on the

mend by 2013, we expect that demand for various natural resource commodities

will continue to be vigorous, thereby driving growth in Saskatchewan.”


You can read the entire report here: http://www.rbc.com/economics/market/pdf/provfcst.pdf




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