REGINA, SASKATCHEWAN--(Marketwired - Oct. 6, 2016) - Regaining its pre-2015 rank among Canada's economic elite may not be likely, but Saskatchewan is seeing modest improvements in its economic landscape that should accelerate even further by 2017, according to the BMO Blue Book released today.
Much like the U.S. Federal Reserve's Beige Book, the BMO Blue Book combines the expertise of BMO's economists with information on current national and provincial business conditions provided to BMO's commercial bankers by local businesspeople.
Saskatchewan's growth has been limited by the slide in oil prices, but the slight upswing in GDP has the farm sector to thank. Agriculture is having a strong year in crop production and steadily rising potash production, in spite of the effect of low global prices.
"It's no surprise that Saskatchewan is affected by oil and gas, which accounts for roughly 15% of their GDP - well below Alberta, but still a significant weight," said Robert Kavcic, Senior Economist, BMO Capital Markets. "The province is again losing migrants to other regions; for the housing market, the slowdown in employment and population growth comes at a time when a glut of new supply still needs to get absorbed."
Indeed, Regina and Saskatoon have record levels of completed and unoccupied residences and prices are slowly decreasing, but home sales are still up quarter over quarter, giving reason for optimism.
This is echoed by the sentiment from BMO's commercial clients. "Though certain industries are rebuilding, Saskatchewan maintains a stable business climate," said John MacAulay, Senior Vice President for Prairies and Central Canada, BMO Bank of Montreal. "There is some hesitation in plans for expansion or purchasing, based on what's happening in oil and gas, but we still see a good amount of investment in operations, specifically with solid advances in dairy and poultry farming as owners take advantage of low interest rates."
The region will continue to experience slow progression and the re-elected Saskatchewan Party will need to consider adjusted timelines for new home construction and other large mining projects until market conditions improve.
Mr. MacAulay added that BMO is here to help with a highly-skilled team of experts who can make lending decisions at the local level to help the bank's commercial clients boost productivity, expand into new markets and make strategic investment decisions that will help propel growth and drive success.
The full BMO Blue Book can be downloaded at: www.bmocm.com/economics.
About BMO Financial Group
Established in 1817, BMO Financial Group is a highly diversified financial services provider based in North America. With total assets of $692 billion as of July 31, 2016, and over 45,000 employees, BMO provides a broad range of retail banking, wealth management and investment banking products and services to more than 12 million customers and conducts business through three operating groups: Personal and Commercial Banking, Wealth Management and BMO Capital Markets.