The Conference Board of Canada said a lack of workers across the province could slow down Saskatchewan's economy.
The Conference Board is expecting strong growth in Saskatoon and Regina in 2013, but it said that growth will slow down unless more workers are brought in.
"This labour force is as stretched as you can have it," board economist Mario Lefebvre said. "It's getting tougher and tougher to find resources when you have a new project or you're looking for employees."
Lefebvre said the unemployment rate dipped below four percent several times in 2013. He said government should do everything it can to make sure that number doesn't sink any lower.
"I know there are already a load of people coming to Saskatoon every year, but you're going to need much more than that if you want to see another two, three, four percent employment growth that you've had over the past few years," he said.
Difficulty attracting workers if labour shortage
The economist said a severe shortage of workers will drive up wages, along with the general cost of living, creating inflation. If that happens, he said it will be very difficult to attract new workers.
"Wages start to go up, house prices go up in tandem, but you're the only one in this game," he said. "The rest of the country is not following suit, so it's going to be tougher and tougher to attract people from elsewhere, because the cost of living here will be out of proportion to the cost of living elsewhere. You don't want that inflation."
Lefevre said governments should focus on immigration policy as a way to bridge the gap.
He cities the need to see population growth between three and four percent to have enough workers available.