Sask. economy hottest in Canada: BMO analysis

June 27, 2008
The Star Phoenix

REGINA - Saskatchewan will continue to have Canada's fastest-growing economy this year and will post real GDP growth of three per cent, says an analysis released by BMO Capital Markets.

That real gross domestic product growth in Saskatchewan (over and above the rate of inflation) will be above the 2.2 per cent  national growth in GDP projected by BMO.

"Saskatchewan boasts Canada's hottest economy," the report said.

The "momentum should continue this year with real GDP growth accelerating to three per cent this year before losing some steam in 2009," the BMO report said.

"The commodity agriculture boom is in full gear in Saskatchewan with exploration activity and crop receipts surging," the report said.

The 3.0 per cent GDP growth rate projected for Saskatchewan this year is above the 2.8 per cent growth rate that occurred last year and also above the 2.5 per cent growth rate BMO projected for next year.

The report also noted housing prices have risen dramatically in the province during the last year as the population has grown and immigrants have moved into the province.

But the days of rapidly escalating housing prices may be coming to an end, the report said.

"Saskatchewan's white-hot housing market is quickly balancing out and downward price pressures like we've seen in Alberta in the past year are likely to take hold in the coming months," the report said.

Looking at the overall national economic picture, the report said there is a marked disparity between the boom times being experienced in Western Canada and the tougher times occurring in Central Canada.

Surging commodity prices have boosted growth in Western Canada while the high value of the Canadian dollar and the slowing U.S. economy have hurt manufacturing industries in Eastern Canada, the report said.

The reports projects a real GDP growth this year of 2.5 per cent in Alberta, of 2.2 per cent in British Columbia and of  2.1 per cent in Manitoba.

But it only projects a 0.2 per cent real growth rate in Ontario and 0.6 per cent in Quebec.

(REGINA LEADER-POST)