Saskatchewan will likely experience another year of negative economic growth in 2016 as well as unemployment levels that haven't been seen for two decades, a Royal Bank report says.

According to a quarterly forecast released this week by RBC, the Saskatchewan economy is expected to show a 0.9 per cent decline in activity this year.

That comes on the heels of the –1.1 per cent change in real gross domestic product forecast for 2015.

Construction activity in Saskatchewan is expected to decline about eight per cent in 2016, compared to the year before, an RBC report says. (CBC News)

"The decline in economic activity this year is mainly a reflection of weakness in the mining sector," the report said.

"Energy mining is being weighed down by persistently low oil prices, although we expect with our projection of modest strengthening in these prices during our forecast will to return the mining subsector to modest positive growth in 2017."

What's led to increasingly gloomy RBC reports for 2016, however, has been weakness in the potash industry.

Potash prices are low, demand for fertilizers is relatively low, and it's believed Saskatchewan potash producers will be idling production for the remainder of the year in response, it says.

"We now expect provincial potash production dropping by 12 per cent this year following double-digit growth in 2015."

Outside of mining, there are other weak spots.

Construction activity is expected to decrease eight per cent in 2016.

Agriculture is expected to be one of the bright spots in Saskatchewan's economy this year, with production of the three most important crops set to rise 4.6 per cent. (Mike Zartler/CBC)

Meanwhile, the 2016 unemployment rate is predicted to rise to a 20-year high of 6.4 per cent from the 5.0 per cent that prevailed in 2015, the report said.

Agriculture could be one of the bright spots this year, with an expected 4.6 per cent rise in production of the province's three largest crops: wheat, canola, and barley.

Meanwhile, the bank predicts the Saskatchewan economy will return to growth in 2017, with the GDP expected to grow 1.6 per cent.