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Economic Report Card

2018 In Review Special Edition: April 2019


Executive Summary The labour market improved dramatically in the first three months of 2019 with year-to-date employment growing in sync with drops in both the number of unemployed and the unemployment rate. Despite this turnaround, all other monthly indicators declined in February 2019. The construction sector was particularly soft with sharp drops in both housing starts and building permits. •

Total employment in the Greater Regina Area was up 0.5% or 700 positions in January to March 2019 over the same period in 2018. At the provincial level, year-to-date employment increased by 8,833 or 1.6%.

Year-to-date employment in March 2019 was up over the same period in 2018 in Agriculture (533), Resource Extraction (267), Utilities (433), Transportation and warehousing (2,033), Educational services (2,000), Health care and social assistance (833), Accommodation and food services (800), and Other services (567).

Year-to-date employment in March 2019 was down in Manufacturing (-933), Wholesale and Retail Trade (-767), Finance, insurance, real estate and leasing (-1367), Professional, scientific and technical services (-1200), Business, building and other support services (-733), Information, culture and recreation (-633), and Public administration (-200).

After a weak performance in 2017, construction employment bounced back in 2018 and through January 2019. However, yearto-date March construction employment is down by almost by 800 positions from the same period in 2018 with a year over year drop of 600 positions in February 2019 likely due to unusually cold weather. The average year-to-date unemployment rate dropped from 5% to 4.7% in March 2019. Year-to-date, the number of unemployed is down 367 in March 2019 from March 2018. Despite growing employment numbers and declining number of unemployed, the labour market picture for the region is not completely positive. Drops in the participation rate (those working and seeking work

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expressed as a percentage of the population aged 15 years and over), the employment rate (number of employed persons expressed as a percentage of the population 15 years of age and over), and an increase in the number of those of working age not in the labour force are problematic. •

February 2019, total year-to-date housing starts are down by -364 units or -82.0%. All categories of starts saw year-to-date declines: Singles (-28 units or -43.8%), semi-detached (-8 units or -57.1%), row (-24 units or -63.2%), and apartment and other types (-304 units or -92.7%).

February 2019 year-to-date building permits are down -35.5% over the same period in 2018. Declines were widespread and occurred across all sub-sectors: Residential (-29.4%), industrial (-95.8%), commercial (-15.5%), and institutional and governmental (-77.1%).

The average year-to-date Housing Price Index Benchmark Price is down from $277,067 in March 2018 to $264,500 in March 2019.

In 2018, with the pace of GDP growth at the national level suggesting that the economy is operating at close to full capacity, the Bank of Canada raised the overnight rate by 0.25% to 1.75% on October 24, 2018, the highest rate since December 2008. However, the Bank of Canada held the rate at this level in March 2019 citing uncertainty stemming from a sudden and unexpected deceleration in GDP growth in the final quarter of 2018. The next rate announcement is April 24, 2019.

2018 Regina Census Metropolitan Area population was up 2.3% over 2017 to 257,337 on the strength of international and intraprovincial migration. This can be expected to continue through 2019 with continued employment growth spurring further inmigration.

The Conference Board of Canada forecasts Regina’s economy to post a 2.1% real GDP gain in 2019, following a 2.2% increase in 2018.


Economic Indicators April 2019

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2018 In Review Executive Summary The Regina economy in 2018 saw the bulk of indicators (employment, residential, commercial construction), posting declines over the previous year. A few areas of strength were observed in industrial building permits, population, and gross domestic product. •

The latest population counts show that Greater Regina Area (GRA) 2018 population was up 2.3% over 2017 to 257,337 on the strength of international and intra-provincial migration.

Total average year-to-date employment in the GRA was down 0.05% or 67 positions in 2018 over 2017. At the provincial level, 2018 employment advanced by 2,367 or 0.4%.

Employment growth was positive in 2018 in Utilities, Construction, Transportation and Warehousing, Finance, Insurance, Real estate and Leasing, Business, Building and Other support services, Educational services and Other services.

Employment in 2018 was down in Agriculture, Resource extraction, Manufacturing, Wholesale and Retail trade, Professional, Scientific and Technical services, Health care and Social assistance, Information, Culture and Recreation, Accommodation and Food services, and Public administration.

The unemployment rate remains relatively low at 5.9% up from 5.1% in 2017.

2018 building permits were down 21.5% from 2017. Most sub sectors posted decline with only industrial permits showing an increase.

Total housing starts in the GRA in 2018, at 1,139 units, were down from 2017 by 40.8% with declines in all classes of starts: single detached, semi-detached, row houses, and apartment units.

The Conference Board of Canada forecasts Regina’s economy to post a 2.1% real GDP gain in 2019, following a 2.2% increase in 2018. Indicator

2017

2018

Chg

%Chg

Population (persons)

251,602

257,337

5,735

2.3%

Employment

140,525

140,458

-67

-0.05%

7,583

8,883

1,300

17.1%

5.1

5.9

.8

15.8%

Participation Rate (%)

72.4

71.7

-0.7

-0.9%

Employment Rate (%)

68.7

67.4

-1.3

-1.8%

702,627

551,469

-151,158

-21.5%

1,923

1,139

-784

-40.8

14,102

14,408

306

2.2%

Unemployment Unemployment Rate (%)

Building Permits Total ($000s) Housing Starts Total (Units) Gross Domestic Product (2007 $M)

The following report is a short synopsis of some key factors influencing the GRA’s economy, and a look into how they performed in 2018.

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Analysis Population and Demographics The latest population counts show that Greater Regina Area (GRA) 2018 population was up 2.3% over 2017 to 257,337 on the strength of international and intra-provincial migration. Sources of Population Growth Driving population growth since 2012/2013 has been international in-migration (immigration) and to lesser extents the natural increase (births less deaths) and migration from within the province (net intra-provincial migration). Migration from other provinces (net inter-provincial migration) has been negative since 2012/2013. Of concern is the continued drop in net inter-provincial migration (-91 in 2012/2013 to -2,802 in 2017/2018). At this level, net inter-provincial migration negates any population gains due to natural increase and is now at just under 50% of international in-migration 012/2013

2013/2014

2014/2015

2015/2016

2016/2017

2017/2018

Births

3,042

3,116

3,146

3,338

3,300

3,330

Deaths

1,746

1,748

1,712

1,769

1,736

1,757

Immigrants

3,517

3,964

3,724

4,740

5,022

5,674

Emigrants

143

239

222

227

292

296

Returning emigrants

116

175

152

152

146

148

Net temporary emigration

99

122

112

98

114

117

Net interprovincial migration

-91

-666

-1,314

-1,286

-1,855

-2,802

Net intraprovincial migration

285

696

631

469

1,259

1,087

1,165

-160

-520

745

627

468

Net non-permament residents

Labour Market Key among the labour market indicators is the change in the total number of people employed in the GRA. With a year-over-year drop of 1,700 positons in December 2018, total average year-to-date employment in the GRA was down 0.05% or 67 positions in January to December 2018 over the same period in 2017. At the provincial level, year-to-date employment advanced by 2,367 or 0.4%. Within the strategic sectors in the GRA (resource extraction, metal fabrication, machinery manufacturing, finance and insurance, agribusiness, and tourism) employment growth was muted. Only Finance, Insurance, Real estate and Leasing was up over 2017 (392). Year-to-date employment in December 2018 was also up over the same period in 2017 in Utilities (125), Transportation and Warehousing (267), Business, Building and Other support services (1,383), Educational services (1,783), and Other services (217). Construction, primarily a supporting sector, saw employment bounce back in 2018 after a weak performance in 2017. 2018 construction employment was up by 1,400 positions from 2017 mostly on the strength of non-residential construction.

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Employment in 2018 was down Agriculture (-317), Resource Extraction (-750), Manufacturing (-983), Wholesale and Retail Trade (-867), Professional, scientific and technical services (-1,292), Health care and social assistance (-900), Information, culture and recreation (-225), Accommodation and food services (-133), and Public administration (-200).

The 2018 unemployment rate, although still relatively low at 5.9%, increased from 5.1% in 2017. Driving the decrease was the addition of 1,300 persons to the ranks of the unemployed. At the same time there was a small drop in the participation rate (total employed and unemployed expressed as a percentage of the population aged 15 years and over), which dropped slightly from 72.4% to 71.7% as it did not keep pace with the growth in the population aged 15 and over.

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Advances in the number of unemployed reflects that the GRA is not experiencing a “discouraged worker� effect and/or significant out-migration to balance the labour market. A discouraged worker is a person of legal employment age who is not actively seeking employment or who does not find employment after long-term unemployment. This is usually because an individual has given up looking or has had no success in finding employment. Construction Construction activity the GRA in 2018 was mostly negative. However, the construction industry, saw employment rebound in 2018 after a weak performance in 2017. 2018 construction employment was up by 1,400 positions from 2017 mostly on the strength of non-residential construction. A city building permit is needed to construct, demolish, build an addition or renovate a building. The City issues the permit and reviews plans to ensure they comply with all current building codes, bylaws and other applicable regulations. Building permits, also a leading indicator of construction activity, were down -21.5% over 2017. The only sub sector that posted an increase was industrial (182.9%). During the same time period Residential (-28.4%), Commercial (-28.6%), and Institutional and governmental (-57.6%) posted declines. New housing starts are a good indicator of a region’s economic health. New housing has a powerful multiplier effect through the economy and is typically used to derive estimates for other consumer-based indicators. People buying new homes also spend money on other consumer goods such as furniture, lawn and garden supplies, and home appliances. Total housing starts in the GRA in 2018, at 1,139 units, were down from 2017 by 784 units of -40.8%. Declines were widespread across all classes of starts: single detached, semi-detached, row houses, and apartment units as the market grappled with over supply and stricter borrowing rules.

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Outlook for 2019 According to the Conference Board of Canada’s Winter 2018 Metropolitan Outlook, Regina’s real GDP grew 2.2% in 2018 and will grow a further 2.1% in 2019 after rising 2.3% in 2017. Employment will increase by 1.5% in 2019, following a 0.8% gain in 2017 and a flat 2018. The Conference Board also expects that the unemployment rate will dip to 5.4% in 2019. With a forecasted 2% increase in population in 2019, more than twice the 30-year average and well above the national average, the Conference Board forecasts total housing starts to bounce back to the 1,700 range as the market finally absorbs the 2017 building spree.

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About EDR

About Praxis

Economic Development Regina Inc. (EDR) is the economic development agency for the Greater Regina Area (GRA).

Praxis Consulting is Saskatchewan’s largest locally-based management consulting firm.

EDR is a not-for-profit economic development corporation, governed by a volunteer board of directors. EDR provides leadership to the community to support industry growth and diversification through retention and expansion of existing business and encouraging investment, development of industry and tourism.

Praxis works collaboratively with clients in the facilitation of growth and excellence. Leveraging an unmatched wealth of experience across multiple sectors, Praxis adds value to their clients through:

In collaboration with key stakeholders, we work to identify, develop and promote opportunities that advance economic prosperity and ensure the GRA offers a vibrant and diversified economy for investors, is a positive destination experience for visitors and offers a high quality of life for residents.

Strategy: Thought-leadership, rigorous planning, and pragmatic strategies.

www.economicdevelopmentregina.com

www.praxis-research-strategy.ca

Research: Information gathering and data analytics.

Results: Cascading strategy and culture within the organization.

Profile for Economic Development Regina Inc.

Economic Report Card - April 2018  

April 2019 edition of the Economic Report Card for the Greater Regina Area. Including a special report of 2018 in review.

Economic Report Card - April 2018  

April 2019 edition of the Economic Report Card for the Greater Regina Area. Including a special report of 2018 in review.

Profile for reginaroc