Fifty-three percent of Saskatchewan people are wrong. At least that’s what a recent survey from Mainstreet Technologies, reported on in the Leader-Post, would have us believe. Mainstreet surveyed Saskatchewan residents about the extent of their optimism with respect to the provincial economy. Fifty-three percent of respondents indicated they believe Saskatchewan is entering a recession. They are wrong.
Technically speaking, a recession only occurs after two consecutive quarters of a decline in GDP. There is every reason to believe that Saskatchewan’s GDP will continue to see moderate growth throughout the coming year, and beyond. Given the strong fundamentals of our provincial economy, it is highly unlikely that we will see any decrease in GDP in 2015.
The truth is Saskatchewan is a thriving and vibrant place, filled with a new sense of identity and purpose. Its people, in particular so many of its new people, dive into life with vigour, energy, and an idea that it is possible to build a better life here. The vibrancy of this place and its people, are based on a solid economic foundation that sees Saskatchewan producing the things that the people of the world need. This foundation is as solid as it has ever been.
While our economy is commodity based, the nature of our commodity-centered economy is diverse. We have a strong and growing manufacturing sector that is creating value-added benefit for commodity producers and extractors. The construction industry is busy building value through the creation of transportation infrastructure and productive capacity. Saskatchewan’s retail sector, our province’s largest employer, is diverse and growing. Oil extraction is slowing down, but agriculture and potash remain strong and are getting stronger.
The low cost of borrowing and the current exchange rates create great opportunities for making and expanding investment in Saskatchewan. Lower labour and fuel costs, and a minor slowdown in work, should result in more competitive pricing for construction services, further reducing the investment costs for financiers. Long-term projections should also be positive. Low fuel costs will drive consumer wealth and consumption in countries like Indonesia, where greater consumption means greater demand for Saskatchewan products such as pulse crops and potash.
While the details show good economic strength, the opinions of individuals consumers really do matter. Frank Hebert once wrote “…fear is the mind-killer…,” and it is also true that fear is the economy deflator. If people believe that our economy is in trouble, then they make choices that hurt the economy, and their prophecies risk becoming self-fulfilling.
So, to the fifty-three percent of Saskatchewan residents who falsely believe the province is headed into a recessions, I say this… just relax. Take a deep breath. Then go spend some money in a locally-owned shop, and look for opportunities to invest in the future of Saskatchewan. Our province will continue to grow, our economy will stay strong, and when oil prices rebound we’ll be ready to take advantage of the opportunities that presents us.
Mark Cooper, President and CEO
Saskatchewan Construction Association
