Call it the potash factor, or a boomerang effect of former Saskatchewan residents heading back home. Whatever the reason, a Vancouver-based consulting firm is telling the City of Saskatoon that it should be gearing up for a population spike.

MDX Development presented a 915-page outlook report to Saskatoon city council this week that sketched out a city that will have 325,000 residents within 16 years, up from around 260,000 today.

The city has the land but not the infrastructure to handle the increase, MDX suggests. The consultant estimates Saskatoon will need six more hotels, at least three million square feet more retail space and a building boom in the rest of the commercial sector to meet demand. Office space will increase by 40 per cent to 6.8 million square feet  and industrial space will need to expand to 22.3 million square feet from the 15 million square feet available today, the study said.

Saskatchewan's largest city is already facing growth pressures. The city has one of the lowest residential vacancy rates in Canada and its industrial vacancy rate has risen slightly to 3.4 per cent this year. So far this year, about 400,000 square feet of new industrial space was started, virtually all of it by speculators.

Saskatoon is riding a provincial economic wave. This week the Bank of Montreal forecast that Saskatchewan will have the highest GDP growth and the lowest unemployment of any province in 2012. Much of the boom is tied to the resource sector, with an increase in potash prices and mining and an sharp uptick in oil exploration and drilling.