Q3 2020 – The good and the not so good

Q3-2020 Saskatoon Region Economic Snapshot

The Good

Coming off an economic contraction of 11.4% in Q2, the Saskatoon CMA’s long journey towards recovery has begun. Although a number of factors that contributed to the slowdown remain, the Conference Board of Canada is still projecting a growth rate of 3.5% for the current quarter and 2.3% for the next (Q4 2020).

Table 1: Economic Growth Forecast for Saskatoon CMA

Q1 2020Q2 2020Q3 2020Q4 2020Q1 2021Q2 2021Q3 2021Q4 2021
Quarterly GDP (%)-0.3-

Source: Conference Board of Canada

Q3 saw improvements in agriculture, retail sales, housing and residential investment. Despite ongoing diplomatic tensions between Canada and China, Saskatchewan is benefitting from increased Chinese buying of agricultural exports. As of August, those gains boosted agriculture exports by 32.6% compared to last year, on an YTD basis. Low mortgage rates resulted in pandemic buying, creating a spike in home sales. Moreover, residential investment was up 7.2% in August, while non-residential investment was down 51.7%. Retail sales have bounced back quickly, topping pre-pandemic levels. This is most likely a result of pent-up demand from the economy closing.

Turning to the labour market, the Saskatoon Region has begun to see a recovery this quarter. The labour market has now recovered 65.9% of the 22,300 jobs lost during the months of March to June. The unemployment rate is now 10.9%, trending lower from its record high of 12.1% in Q2. Saskatchewan’s labour market is also seeing better results relative to the rest of the country. The provincial unemployment rate is the lowest in Canada at 6.8% and sits well below the national average of 9.0%. Employment in most industries has mainly recovered with the exception of manufacturing, culture and recreation, and accommodation and food services.

The Not So Good

According to six major Canadian financial institutions, Saskatchewan is still expected to experience a recession in 2020. Forecasts by the financial institutions show an estimated average contraction of 5.5% for Saskatchewan in 2020, followed by a rebound of 4.3% in 2021.

Table 2: Consensus Economic Growth Forecast for Saskatchewan (%)

Financial Institutions20182019f2020f2021f
National Bank of Canada1.3-0.8-5.94.7
Average Economic Growth1.3-0.8-5.54.3

Source: RBC, TD, BMO, CIBC, Scotiabank and NBC

Looking at Saskatchewan’s industries, the significant slump in the oil and gas industry has clearly dampened the provincial economy, with oil production down 23.9% through September since the start of the pandemic. Manufacturing has also seen sales fall by 17.8% since the pandemic, more than the national average, and non-residential investment is down significantly. And despite the strength in retail sales, slower growth is expected to replace the recent spike in activity.

The Conference Board of Canada is not anticipating a vaccine to be available until the fall of 2021. This will keep outbound and inbound travel suppressed longer than what was envisioned for the economy. A negative impact on industries including air travel, accommodations, and arts and culture will be prolonged.

Table: Key Indicators of the Saskatchewan Economy

Real GDP (y/y % change)1.3-0.8-5.54.3
Nominal GDP (y/y % change)1.40.5-9.17.1
Employment (y/y % change)0.41.7-4.73.8
Unemployment (%)
Housing Starts (x 000s)
Retail Sales (y/y % change)-0.3-0.5-4.10.4
CPI (y/y % change)

Source: RBC, TD, BMO, CIBC, Scotiabank and NBC

Looking Ahead

Although the economic outlook over the course of this year has improved, largely as a result of our past success in containing the spread of Covid-19, cases are starting to rise. Many industries are still reeling from the impact of the pandemic, and without a vaccine a full recovery of the economy is unlikely on the horizon. It is anticipated that if a second wave of Covid-19 was to hit the province, and the economy had to shut down again, the impact on businesses and the economy will be much greater than the first. All factors considered, SREDA is cautiously optimistic for a continued recovery going forward; therefore, SREDA is increasing its economic rating for the Saskatoon Region slightly from a C- to a C+.

SREDA is committed to providing timely, balanced and digestible information about the performance of the local economy. If you have questions or feedback, contact us at

Tyler Nguyen

Manager, Economic Intelligence
(306) 952-2400