SASKATOON, SASKATCHEWAN AND REGINA, SASKATCHEWAN--(Marketwired - April 5, 2013) - The next three years will bring 10,000 new jobs to Saskatoon and 7,000 new jobs to Regina, according to a new report released today by BMO Economics.
The report on Saskatchewan's two biggest cities is the latest in a series of economic, housing and business overviews for various cities and regions across Canada that will be published by BMO throughout this year. BMO released today's report in advance of its Annual Meeting, which will take place in Saskatoon on Wednesday, April 10.
"Saskatchewan remains among the top economic performers in Canada, with strong resource-sector activity helping to maintain above-average growth," said Robert Kavcic, Senior Economist, BMO Capital Markets. "Real GDP is expected to grow 2.4 per cent this year, well above the national figure of 1.5 per cent. The Saskatoon and Regina economies continue to perform relatively well, with Canadians drawn to the region's job prospects, above-average wages and affordable housing."
Employment growth remains solid in the province, rising nearly 4.4 per cent year-over-year in in Q1 2013, the fastest pace in Canada and pulling the jobless rate below 4 per cent, the lowest in more than 4 years. "With more than half of the province's workforce, Saskatoon and Regina are driving this trend, up 6.4 per cent year-over-year and 4.3 per cent year-over-year respectively and boosted by strong growth in the resource, construction and trade sectors," noted Mr. Kavcic. "Looking out over the medium term, Saskatoon and Regina will likely see about 10,000 and 7,000 jobs created, respectively, by the end of 2016, pinning the unemployment rates close to 4 per cent."
"Both Saskatoon and Regina are choice destinations, with local businesses benefiting from the ongoing economic strength across the province," said John MacAulay, Senior Vice-President, Prairies, BMO Bank of Montreal. "With local businesses driving ahead and making important investments in new equipment, expanding their operations and hiring people, the best is yet to come in both cities. BMO is open for business; we encourage businesses to get their share of the $10 billion in credit BMO has made available, giving them access to the capital they need to grow."
The report, released today, revealed:
- Oil production is now running at about 170,000 barrels per day, spurred on by activity in the Bakken, just south of Regina.
- While potash producers have scaled back output alongside weaker demand in China and India, the long-term prospects in the sector remain encouraging. BHP Billiton's $14 billion Jansen mine 140 km east of Saskatoon is expected to produce 8 million tonnes per year when completed.
- Residential construction is a major driver of growth, as homebuilders keep pace with a surging population.
- Non-residential activity is also firm; the combined value of non-residential permits in the two cities was $836 million in the 12 months through January, near the highest on record. One attention-grabbing project is a new $278 million stadium in Regina to house the Saskatchewan Roughriders, with related urban development expected to get underway later this year.
- Existing home sales were 25 per cent and 14 per cent below year-ago levels in Regina and Saskatoon, respectively, in the 3 months through February. That is a steeper decline than the 13.3 per cent drop seen nationally, but strong population growth trends are still keeping sales elevated by historical standards.
- In Saskatoon, sales volumes hit a record of nearly 5,500 units in 2012, and are about 25 per cent above the 10-year average despite the recent softening.
- At about 3.5 times median household income, prices in Regina and Saskatoon remain significantly cheaper than those in Canada's other major cities. With stable interest rates and more ample supply now on the market, affordability should remain reasonable in both cities. The Province's first-time homebuyers' tax credit of up to $1,100 is also helping new buyers.
The full report is available here: http://www.bmonesbittburns.com/economics/reports/20130405/rc130405.pdf.
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 $542 billion as at January 31, 2013, and more than 46,000 employees, BMO Financial Group provides a broad range of retail banking, wealth management and investment banking products and solutions.