The Saskatoon Region economy enjoyed somewhat of a golden age from roughly 2005 to 2014. Prices for almost everything that is grown, dug up, or drilled around the province were up, up and away.
Today, headline economic growth in the Saskatoon Region has cooled off. Uranium is at multi-year lows, potash is selling for less than $250/tonne, oil is back around $40 per barrel and to top it off the Riders are 1 and 5… But, considering how far commodity prices have fallen, the Saskatoon Region economy is holding up remarkably well (the Riders are another story).
The proof is right there in the numbers. The July unemployment rate in the Saskatoon Region (6.1%) remains below the Canadian average (6.9%) and weekly wage rates are third highest among the provinces. It’s not that Saskatoon is immune to low commodity prices – it’s that the ‘D’ word that local authorities love to raise when talking about the Saskatoon economy – diversification – is helping to lessen the blow of low commodity prices.
What follows is a list of five bright spots of the Saskatoon Region’s diversified economy which continue to thrive in 2016 despite low commodity prices:
Non-residential construction – The number of large construction projects getting started in the Saskatoon Region is extensive (think two bridges, multiple overpasses, schools, Children’s Hospital, Remai Modern Art Gallery, no end to road work projects, and the list goes on). Government and institutional construction investment jumped to $77M in Q1 2016 – its highest quarterly level in 6 years. The Provincial Government continues to invest heavily in capital projects and Justin Trudeau has been clear on the Federal Government’s intent to spend money on infrastructure. The spending taps in the non-residential construction sector have been turned on, and they are likely to be opened even further.
Agriculture – (knock on wood) It’s dangerous to merely mention the prospect of a strong year until the crop is in the bin, but I’ll do it anyway. 2016 looks like it’s shaping up to be a good year for crop volumes. The Ministry of Agriculture Crop Report shows that as of late July harvest is already underway in some areas and a majority of crops are rated as either good or excellent condition. Agriculture remains the backbone of the provincial economy and when farmers bring in revenue, the benefits extend out into almost every nook and cranny of Saskatchewan.
Science and Technology – The secret phoenix that lurks behind the scenes in Saskatoon. While it’s not an easy one to quantify, the science and technology sector in Saskatoon continues to secretly do its thing. The technology industry globally is booming (think Google, Facebook and 3D Printing). And, unlike commodities the tech sector isn’t so prone to the boom and bust cycle. It just grows and grows. Residents in Saskatoon perhaps don’t always realize how fortunate we are to have a piece of the technology pie.
Renovation Market – While new housing construction is down and many builders are sitting on more inventory then they would like, the home renovation market has quietly made up for the vast majority of this slack. Homeowners invested $415M into improving their homes in Q1, up 34% from Q1 2015.
Population Growth – A bit of a tricky one since Saskatchewan continues to lose residents inter-provincially; however, thanks to robust international immigration, Saskatchewan’s net population is growing faster than the Canadian average. While data at the city level isn’t available by quarter, it’s a safe bet that many of these migrants settle in the Saskatoon Region. Many migrants who come to Saskatoon start or invest in local businesses as well as help bolster the labour force, drive growth in retail spending and demand for housing.