Province gets a "C" grade on labour productivity growth
© Conference Board of Canada
Resource boom gives Saskatchewan an "A+" grade for economic performance
Saskatchewan ranks second only to Alberta for economic performance—both within in Canada and across 16 advanced countries—according to The Conference Board of Canada's first "How Canada Performs: Economy" report card to compare the 10 provinces and 16 advanced countries.
Released today, and building on previous "How Canada Performs" analyses, the Economy report card is the first of six to be produced over the next year on Canadian and provincial socio-economic performance.
"Saskatchewan is becoming a leading global economy," said Glen Hodgson, Senior Vice-President and Chief Economist. "The challenge is for Saskatchewan to capitalize on the resource boom by boosting labour productivity and increasing flows of foreign direct investment in and out of the province."
Like Alberta, Saskatchewan gets an overall "A+" grade for economic performance in 2013. Newfoundland and Labrador is the only other "A+" grade among the 26 jurisdictions with overall scores.
Saskatchewan earns top grades in 2013 for GDP growth, employment growth and a low unemployment rate.
Saskatchewan gets a "B" grade on its standard of living, with a per capita income level, below Alberta, but on par with Switzerland.
Lofty increases in employment and GDP are unlikely to continue in the short term because global commodity prices are not expected to climb significantly.
Saskatchewan earns "A+" grades for both GDP growth and employment growth in 2013, with stronger performance than any of the top international countries. Saskatchewan has the second-lowest unemployment rate (only Norway is lower), which scores another "A" grade.
Although global commodity prices have been weaker over the past year and Chinese demand has slowed down somewhat, there is still enough resilience in commodity prices to ensure that provinces in Western Canada will continue to benefit from strong global demand and relatively high prices for their resources. However, it is unlikely that increases in real GDP growth of a lofty three to five per cent will continue over the next year or two because global commodity prices are not expected to climb significantly.
Saskatchewan earns a "B" grade on its standard of living, with a per capita income level close to that of Switzerland, lifted by recent strong growth in real GDP due to the resource boom.
Saskatchewan only gets a "C" grade on labour productivity growth. It has made progress and still ranks third among the 10 provinces, which is a jump from sixth in the 1990s. The main factor driving productivity improvement in the province is capital intensity (investment in plants and in machinery and equipment per hours worked). The resource-intensive provinces—Alberta, Saskatchewan, and Newfoundland—have higher machinery and equipment (M&E) investment per worker than the national average. And Saskatchewan and Alberta have higher average capital intensity than in the United States.
In order to sustain its rising performance, Saskatchewan will need innovative approaches to making the most of its human talent, improving productivity, and increasing competitiveness. The Conference Board of Canada is helping the province respond to these challenges at the Saskatchewan Forum 2014, May 27-28, in Regina.
Saskatchewan earns a "C" grade on inward greenfield foreign direct investment (investment in Saskatchewan). Greenfield foreign direct investment (FDI) is investment that expands an existing business or creates a new business, as opposed to a merger or acquisition. The province's performance is poor on outward greenfield FDI (Saskatchewan firms investing elsewhere in the world), where it gets a "D" and ranks 22nd among 26 comparator regions.
The Conference Board will host Prairies Business Outlook Webinar, focusing on Manitoba and Saskatchewan, on June 25, at 9 a.m. Central time.
How Canada Performs is an ongoing research program at The Conference Board of Canada to help leaders identify relative strengths and weaknesses in Canada's socio-economic performance. The How Canada Performs website presents data and analysis on Canada's performance compared to peer countries in six performance categories: Economy, Innovation, Environment, Education and Skills, Health, and Society.
This is the first year that provincial and territorial rankings are included in the analysis.
The Education and Skills report card will be released in June.