Global News, May 19 2015- A collapse in oil prices will slow down Saskatoon’s economy, according to a recent report from the Conference Board of Canada. The city’s gross domestic product (GDP) growth is forecast to be limited to 1.8 per cent in 2015.
For five of the past six years, Saskatoon has seen GDP growth of more than six per cent.
This slowdown of economic growth will be led by a dramatic cooling in Saskatoon’s resources, agriculture and utilities industry – due to lower oil prices.
“A dramatic reversal of fortune will see long-standing growth leader Saskatoon near the bottom of the pack this year,” said Alan Arcand, associate director with the Centre for Municipal Studies.
“Economic growth should pick up next year but remain modest by historical standards.”
The non-profit organization says that although growth will cool considerably, Saskatoon should be able to stave off a recession. Real GDP growth is projected to be 2.2 per cent in 2016.
Employment growth in Saskatoon’s census metropolitan area (CMA) is expected to slow to 0.6 per cent this year, the weakest since 2011.
The city’s manufacturing and services sectors could also experience slower gains in line with a cooling economy. Likewise, local construction output is set to slow to 2.2 per cent in 2015, as population increases ease, leading to a lower housing demand.
With the exception of Calgary, Edmonton, Saskatoon and Regina, most of the 13 CMAs covered by the report are expected to see their economies improve this year.
“The collapse in oil prices has significantly altered the economic outlook among Canada’s largest cities. Most other cities will see their economic fortunes improve this year, thanks largely to a weaker Canadian dollar and a stronger U.S. economy,” said Arcand.
“On the other hand, the slump in oil prices will take its toll on the economies of Calgary and Edmonton and to a lesser extent on Regina and Saskatoon.”
Toronto, Vancouver and Halifax will be the fastest growing metropolitan economies in 2015, according to the organization.