Moderate growth expected to prop up Saskatoon economy
Posted on May 3, 2016 in In the Media
The ongoing slump in commodity prices led the Saskatoon Region Economic Development Authority (SREDA) to downgrade its rating of the city’s economy, but the organization’s president and CEO says signs point to “moderate and steady” growth of between 1.5 and two per cent this year.
“There is a view out there that we have seen the worst and things will be picking up a little bit … We are cautiously optimistic that things will continue to get better, and we’ll grow a little bit this year,” Alex Fallon said of SREDA’s first quarter 2016 economic update report.
Released Monday, the report — which uses a variety of economic indicators to generate a letter grade — awarded the local economy a ‘C,’ down from the ‘B-minus’ it earned in the fourth quarter of 2015. Fallon attributed the decline to the effects of weak potash, uranium and oil prices seeping out of the resource sector and curbing investment elsewhere.
According to the report, investment declined in several sectors, with housing starts falling 38.6 per cent, building permit values sliding 53.4 per cent and the number of new business licenses declining 17.2 per cent year-over-year. Although the Saskatoon region’s population grew by 0.6 per cent over the last three months, that expansion was offset by rising unemployment and a contracting labour force, the report stated.
Fallon said that while the numbers are “concerning for sure,” it’s important to take a wide view. He said the Saskatoon region experienced “some pretty good times” over the last decade, when oil topped $100 per barrel and potash prices peaked above US$900 per tonne, meaning what appears to be a contraction could be a return to more normal growth.
“When you look at it over the last five, ten years … it tells a slightly different (story),” Fallon said.