How is Saskatoon really doing?

The economic road map SREDA has developed in partnership with the Conference Board of Canada will be released May 18th. The report will highlight three separate forecasted growth paths for the Saskatoon region over the next twenty years. These three economic growth scenarios align to an optimistic, pessimistic and base case. SREDA will be taking this forecasted information and begin tracking the region’s growth on a quarter by quarter basis to see which path we are on.

To do this the SREDA Insights team is currently tracking on a daily basis major economic indicators such as: labour, affordability, immigration, population, retail, housing starts/sales, commodity prices etc. Then we will evaluate the indicators to determine which of the three scenarios the Saskatoon and region is tracking to in order to provide strategic insight for the business community. Economic indicators and trends are also being monitored at the regional, national and international level to help project to what path the economy will align with in the future. This information will not only help us advise the city but also our local business community.

So, how is Saskatoon’s economy doing now that the first quarter (Q1) is over?

After analyzing our Q1 stats for 2014 and comparing them to Q1 of 2013, we discovered that for the most part, the economy is still on an optimistic growth path of 4.5% – well exceeding the projected 2.9% in our growth scenario. However, transitioning through second quarter we project growth to moderate. One disappointing figure was the growth in the Wholesale and Retail Trade sector which grew at a slower pace than our most pessimistic scenario of 2%. The low growth in this sector could be a result of limited room for expansion because of the low vacancy rates we have been seeing for retail space. Simply put, if we don’t have enough space available for new retailers, this will inevitably stunt growth in this sector.

The substantial growth in the goods producing industries, specifically in the manufacturing sector, will be offset by slower growth felt in the services producing industries. Unemployment rates have stayed low as the labour force grew as fast as employment growth within the region adding over 7500 jobs since Q1 of 2013.

In addition to tracking economic indicators to determine overall health of the local economy, the SREDA Insights team held their first executive roundtable meeting to engage with industry leaders in the construction sector. This three hour interactive session was used to explore critical industry uncertainties and associated change drivers to develop future scenarios for the construction industry. Identifying threats and opportunities arising from a particular scenario helps businesses within the construction sector be better prepared for continued growth. It was also important to engage with these key industry leaders in the construction sector to fully understand what the real drivers of change are in the economy.

Three scenarios were developed from this session and will now be tracked by the SREDA Insights team. Each scenario will have a series of key indicators and change drivers that we will track and monitor to determine if any of the scenarios are starting to materialize and possibly threaten this vital sector in our economy. You can see the three scenarios and the current findings HERE.

The SREDA Insights team will be holding the next executive roundtable May 21st, engaging with the metal fabrication industry.