Saskatchewan’s economy is expected to continue its recovery from a steep downturn in 2015 and 2016 that was caused by a slump in the energy sector.
The RBC Economics provincial outlook for December said GDP growth in Saskatchewan for 2017 is now projected to be 2.1 per cent, and the province is expected to lead the country in growth for both 2017 and 2018.
RBC said GDP growth in both years is projected to be 2.7 per cent, due to rebounds in the agriculture and mining sectors and a rise in investment spending.
“Data through to August points to a possible double-digit increase in production for the year,” stated the report.
“Provincial potash producers secured delivery contracts with key overseas customers in China and India amid generally strong global demand.”
The report did caution that other mining sectors are less than robust, particularly in the uranium sector where production has been cut at a number of facilities.
Agriculture is also expected to rebound in 2018 following a three per cent drop in output due in part to the unusually dry weather and overall capital investment in Saskatchewan will improve due to sustained gains in oil prices and a strengthening of the mining sector.
“Saskatchewan’s economy has been resilient in the face of challenges in the resource sector,” Saskatchewan Economy Minister Steven Bonk said in a release.
“We have made some tough decisions to place the province in a position of strength for the future, and we are pleased to see these decisions yielding positive results for our economy.”
WATCH BELOW: RBC forecasting Saskatchewan will lead Canada in GDP growth in 2018
RBC said employment in the province is projected to grow 0.5 per cent in 2018, with unemployment falling to 5.7 per cent.
Inflation is expected to accelerate, with the consumer price index forecast to rise 2.4 per cent during 2018.
The report also noted that housing starts are expected to remain steady at 5,000 units.