Most politicians, business persons, home owners, media, etc believes Saskatoon will have endless growth. "It is not a boom, but a new normal." But in the SP article,
"Saskatoon and are balloons" not everybody is drinking kool-aid;
University of Saskatchewan economist Eric Howe said the theory that
the population boom will continue on an upward trajectory toward 500,000
or more people for Saskatoon is short-sighted. The population gains can
be attributed mainly to the capital-intensive construction work
happening at potash mines. When that expansion ceases, the population
gains will trend downward, he said.
"It's only human nature to say
there are people coming here and the world has finally caught on," Howe
said. "That's not what's going on. It's just a resource boom. Enjoy the
boom while it happens, but don't think it's going to last forever."
Exactly, resources ( not as big now) construction and related housing industries are what is driving this boom. Need further proof, take a look at the market share of employment in resources and construction.
Here is fishing, forestry, mining, oil and gas
Here is construction
The biggest driver of Saskatoon's boom has always been real estate. With house prices doubling in just a few short years, people are feeling wealthier and so HELOC's to the rescue. According to a study from the Dallas Fed. for every $100 increase in house prices a $9 increase in consumer spending will most likely happen. Whereas $100 increase in stocks leads to a $3 increase in consumer spending. This is known as the "wealth effect". This is a big reason why Saskatchewan has been among the leaders in the nation in retail spending. And with that spending comes more jobs. But when the debt expansion slows, so do the jobs. If the boom is based on debt, then the boom will turn to bust.
Unfortunately, most people don't care what university professors say. They're limp-wristed liberal elitists who haven't done a day's honest work in their lives, right?
ReplyDeleteGood blog.
I posted before about Saskatoon and Saskatchewan going through a sort of Fort McMurray potash expansion effect.
ReplyDeleteI dont think it is out of the ball park to say that there is something like 5000 construction workers or greater currently on the expansions. I was part of a potash expansion something like 30 years ago and soon after the expansion, the mine actually laid off workers.
In any event when the expansions are done, I would expect a good number to head back to their home province.
Highway 16 is definitely similar to fort mac with hundreds of construction workers going to work each morning and then heading back in the evening.