One measure of an economy is the Gross Domestic Product or GDP - an estimate of the value of goods and services produced in the economy. While the GDP as a measure of economic prosperity has its detractors, it is certainly the most commonly used and most comprehensive economic statistic. When the GDP is adjusted for price change, that is, measured in constant dollars, it is referred to as real GDP.
Preliminary estimates for 2004 show Saskatchewan's GDP at $40 billion in nominal terms and $33.2 billion in constant 1997 dollars. Over the ten year period from 1994 to 2004, real GDP has grown by an average of 2.1% per year in Saskatchewan (see Figure 2.1). This is much lower than the 3.3% average growth rate for Canada as a whole.
A “recession” is defined as a period when real GDP declines. That is the value of goods and services produced in the economy, after adjusting for inflation, declines. (There is no accepted definition of a “depression”.) There have been three recessionary periods in Saskatchewan in recent times - 1988, 1992, and the 2001/02 period. The 1991 recession was national in scope whereas the 1988 and 2001/02 recessions were unique to Saskatchewan and largely the consequence of poor grain crops.
One way to look at economic activity is to examine the expenditure side of the GDP equation, the players in the economy that purchase the goods and services produced. These are sometimes referred to as the economic engines and there are four.
Figure 2.2 shows the relative sizes of the four economic engines in Saskatchewan using 2004 figures as an example. Of the $40 billion dollars, more than one half is accounted for by consumer spending. The other economic engines - government spending and business investment - account for much smaller shares, 23% and 20% respectively.