REGINA, SASKATCHEWAN--(Marketwire - Jan. 17, 2013) - Despite some recent softening, Saskatchewan's economy remains among the top performers in Canada, according to the Provincial Monitor report released today by BMO Economics. Real GDP is expected to expand 2.6 per cent in 2013.
"Activity in the oil & gas sector is still strong, and the Province is expecting double-digit growth in oil production in fiscal 2012-2013," said Robert Kavcic, Senior Economist, BMO Capital Markets. "Despite drought ravaging much of the U.S. Midwest last summer, crop conditions in Saskatchewan for most varieties were good, with adequate moisture across the vast majority of the province. This, combined with elevated prices, allowed much of the farm sector to reap significant income gains."
While resource-sector activity is still robust in the province, activity has moderated, particularly in the potash sector-a soft pricing environment has led some producers to curtail production. "Potash Corp. announced more temporary shutdowns in October, and other global producers have scaled back output alongside weaker demand in China and India," noted Mr. Kavcic. He added that some uncertainty also still surrounds BHP Billiton's $12 billion Jansen mine.
Employment growth remains solid in the province, rising 2.1 per cent year-over-year in 2012, keeping the jobless rate below 5 per cent for most of the year. "The broader Saskatchewan economy is also performing well, with strong retail sales growth, firm population trends and a healthy housing market," stated Mr. Kavcic. "Existing home sales were up 7.6 per cent year-over-year through November, but more supply has helped balance the market in recent months."
"Saskatchewan continues to be an attractive place to live, work and invest," said John MacAulay, Senior Vice President, Prairies and Central Canada, BMO Bank of Montreal. "Businesses are continuing to invest and build for future growth - not just in the resources sector, but across the entire spectrum. When we look at small businesses across the Prairies, our BMO Confidence Report shows the majority of entrepreneurs are confident and the majority expects their business to grow this year."
The Province of Saskatchewan revised its fiscal 2012-2013 surplus estimate in the General Revenue Fund to $56.2 million (0.1 per cent of GDP), from the $47.5 million projected in the budget. Revenues are now pegged at $11.2 billion for fiscal 2012-2013, down $51 million (0.5 per cent) from the budget plan, with resource revenues the biggest area of weakness, tracking $405 million (13 per cent) below the original plan.
The full Provincial Monitor can be downloaded at www.bmocm.com/economics.
About BMO Financial Group
Established in 1817 as Bank of Montreal, BMO Financial Group is a highly diversified North American financial services organization. With total assets of $525 billion as at October 31, 2012, and more than 46,000 employees, BMO Financial Group provides a broad range of retail banking, wealth management and investment banking products and solutions.