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Investment, commodity production expected to keep Sask. near top of provincial growth table, report says

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Despite uncertain economic times, commodity production and investment-led gains are expected to keep Saskatchewan at or near the top of the provincial growth table in the immediate future, an economic report says.

The report – authored by principal economists for Canadian Economics at Desjardins, Marc Desormeaux and Helene Begin – says that oil, agriculture and uranium outputs are expected to continue rising in Saskatchewan.

Uranium output from Saskatchewan is expected to see a boost thanks to the 2022 restart of the McArthur River and Cigar Lake mines, the report said.

Meanwhile, staple crops are expected to lift export values thanks to China’s reopening of the market and subsequent strong prices.

“Though droughts are an ongoing risk,” the report said.

The outlook for potash however remains unclear as output is being curtailed in response to possible input product shortages.

Investment in Saskatchewan is being led by the first stage of the $7.5 billion Jansen potash mine project, the report said.

According to the report, despite labour market gains lagging behind the national average so far in 2023 there are signs that Saskatchewan will outperform moving forward.

“The province’s April job vacancy rate trailed only that of B.C. and Quebec. As such, recent record population gains—boosted more by international immigration than anywhere else—should help fill job shortages over time,” the report said.

According Desjardins – Saskatchewan’s unemployment rate is forecasted to be 4.8 per cent in 2023 and 5.9 per cent in 2024, the second lowest this year and next trailing Quebec by less than a percentage point.

The report also said that Saskatchewan will continue to remain “little exposed” to rising real estate costs and higher interest rates, which will limit the risk of slowdown as “monetary policy takes effect.”

Saskatchewan’s real GDP (Gross Domestic Product) growth in 2024 is forecasted to be 0.9 per cent, behind only Alberta, the report indicated.

The province’s nominal GDP growth in 2024 is expected to be third highest at 4.4 per cent behind only Newfoundland and Labrador and Alberta once again.

Nominal GDP is GDP in current dollars not adjusted for inflation rates, while real GDP adjusts numbers by fixing currency value which eliminates distortion caused by price inflation or deflation.

The report says that Saskatchewan’s inflation rate in 2023 is forecasted to be 3.7 per cent, which is expected to drop to 2.3 per cent in 2024.

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