The Conference Board of Canada has released its Territorial Outlook for 2012, and the forecast looks good for the territory.

"It's a pretty positive forecast for the Yukon and for the three territories combined,” Marie-Christine Bernard, the board's associate director of forecasting and analysis, told the Star recently.

"There are obviously some short-term preoccupation with the uncertainty in the global economy, but it's generally quite positive.”

The report shows much of the growth this year and in the future will be related the mining sector.

"The conditions for the mining sector are quite positive... I think it will stay quite good for the Yukon for the foreseeable future at least for the next decade or so,” said Bernard.

The report says "the rapid pace of development in the mining industry will be the primary economic driver in the territory this decade.

"Between 2013 and 2020, mining output in the Yukon will grow by an average compound rate of 10.7 per cent per year.”

The data indicate the three producing mines in the territory will reach their production targets for 2012, Bernard noted.

"It's looking good for growth. In the next few years, a lot of the growth will be coming from the development of new mines in the territory,” which will translate into higher employment in the construction industry, she noted.

Real GDP in the territory will rise by 3.7 per cent this year, after growing by 5.6 per cent last year.

The report blames the slow in growth on a decline in construction activity and "easing commodity prices,” but notes the Yukon economy will still grow faster than the economies of most provinces.

Weakened commodity prices have been a factor in companies reducing mineral exploration budgets this year. Total exploration is expected to fall by one third compared to 2011, the report says.

In 2011, the exploration boom reached an all-time high, with $307 million in exploration spending, the report notes.

Last January, Natural Resources Canada estimated exploration spending in the Yukon could hit $285 million this year, but the conference board writes that the territory may not reach that projection.

But the report does foresee a turnaround in prices for the Yukon's key commodities, including copper.

"Demand will be boosted by Chinese demand while supply will be limited by the major copper producers holding back on approving major projects.”

The construction industry will also experience a cooling declining by 11 per cent this year. It is expected to reach an all-time high in 2014 with three mines under construction.

"The forecast calls for 34.4 per cent growth in 2013 and 4.3 per cent in 2014. The industry will then cool down in 2015 when the Eagle and Carmacks mines reach the production phase.”

In residential construction, nominal investment grew by 3.4 per cent in 2011, but the housing market remains tight and the apartment vacancy rate is forecast to remain low at 1.5 per cent.

Growth in the service sector is also expected, with a 5.2 per cent increase in disposable incomes and a 5.2 per cent rise in retail sales estimated this year.

In 2013, those numbers should jump, with a forecast 10.6 per cent increase in disposable income and an 11 per cent boost in retail sale.

Overall, growth this year will be mostly supported by the three producing mines.

In 2013, the growth rate is expected to pick up, and the board is forecasting a 7.3 per cent rise in real GDP.

The report continues that businesses which support both the construction and mining industries will also grow rapidly, as will health and social service providers as the Yukon's population ages.

While labour markets have been tight in the Yukon this year, the board has forecast the unemployment rate will dip below 5.5 per cent in 2013 and remain low for the forecast period, until 2025.

Mining and construction will expand employment, with the construction industry expected to employ 400 people between 2011 and 2016.

This year, employment is only expected to expand by 0.6 per cent.

While the territory has a lower share of its population aged 65 and older than Canada as a whole, the population in the Yukon is aging more quickly.

The average age of a Yukoner is currently 37.7 but that will climb to 41.2 by 2025.

As the rate of natural increase (births minus deaths) declines, population growth will result from international and interprovincial migration.

"Next year should see a combined net interprovincial and international migration gain of over 500 people, with net-migration slowing to under 100 per year by 2025.”

In terms of government revenue, the Yukon's 2012-2013 budget predicted its third straight surplus this year of $80 million.

The forecast predicts Yukon's finances to "remain in good shape” over the long term.

Revenue from income taxes and corporate taxes and other "own-source revenues” currently represents 28.7 per cent of YTG's total revenues.

That percentage will grow to 29.2 per cent by 2020-2021 as the economy expands,the report says.

But it will fall back to current rates by 2025-2026 as the Canada Health Transfer increases with the territory's aging population.

Overall, the report says, "the territory will continue to generate strong revenue growth to support capital and program spending.”