Sask. economic growth lowered to 0.8% in 2014

REGINA — Saskatchewan, which has led the provinces with average economic growth of 4.0 per cent since 2010, is expected to see real gross domestic product (GDP) advance by just 0.8 per cent in 2014 — the lowest GDP growth among the provinces — says the Conference Board of Canada’s latest forecast.

“The province, which has been a growth leader in recent years, is dealing with weak potash prices and the after-effects of the abundant crop of 2013, and its economy will make barely any gains this year,’’ said the Conference Board’s provincial outlook released Tuesday.

Fortunately, Saskatchewan will continue to add jobs, and its unemployment rate will continue to be the lowest of any province. And next year the province should see stronger growth return, albeit moving from last place in 2014 to eighthplace overall, ahead of Newfoundland Labrador and Quebec, in 2015.

“Next year promises stronger growth for the province. A rebound in potash mining, combined with strong growth in other goods-producing industries, will lift overall real GDP growth to 2.3 per cent.”

Like RBC, which lowered its 2014 GDP growth forecast for the province from 2.0 in March to 1.4 per cent in June, the Ottawa-based economics forecasting agency said the projected sharp decline in agricultural production from last year’s record crop is largely responsible for the steep drop in economic output this year.

“After a bumper crop last year, agriculture will fall back to levels more in line with historical averages,’’ the Conference Board added.

“Potash mining will remain under pressure — prices are still low and production has been cut as a result,’’ the report said. Potash prices plummeted below $300 US per tonne last year when the Russian-Belarusian potash cartel collapsed.

On a more positive note, uranium mining is expect to post strong gains this year, as production began in March at Cameco’s long-delayed Cigar Lake uranium mine.

Manufacturing and construction will also post decent gains.

Saskatchewan’s service sector will post healthy growth this year, which will help offset the retreat in the goods-producing industries. The province will add 6,500 new jobs, and its unemployment rate — at 4.3 per cent — will continue to be the lowest of any province.

The service sector will also register decent gains in 2015. Saskatchewan will add 8,700 new jobs next year and again be able to boast the lowest unemployment rate among the provinces at 4.4 per cent.