Impact Regina Quarterly Report

Impact Regina

Impact Regina Impact Regina is joint initiative between Regina Regional Opportunities Commission, Praxis Consulting and SJ Research Services. This quarterly publication will provide aggregated regional economic data, and will present a concise economic snap shot of key economic indicators for the Regina region. The Economic Indicators will be updated monthly and housed on the RROC website, www.reginaroc.com.

Once per quarter, Impact Regina will go beyond the Economic Indicators for a Quarterly Feature Report on a major economic story in our region. This quarter we’re providing an analysis of the economic impact of the stadium project.

Next quarter, we’ll examine how the oil price downturn has affected Regina businesses.

Economic Indicators - September 2015

Month to Month Aug 2014

Aug 2015

137,600

138,400

800

3.8

4.5

0.7

July 2014

July 2015

Consumer Price Index (2002=100)

129.9

132.2

2.3

Building Permits Total ($000s)

80,723

152,793

348

185

2013

2014

231,295

237,758

2014

2015f

14,086

14,501

Employment Unemployment Rate (%)

Impact Regina

Chg

Housing Starts Total (Units)

Population (persons) July 1

Gross Domestic Product (2007 $M)

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Year to Date

% Chg

Chg

% Chg

Aug 2014

Aug 2015

0.6%

135,525

137,138

1,613

1.2%

18.4%

3.8

4.5

0.6

17.0%

July 2014

July 2015

1.8%

129.4

131.2

1.8

1.4%

72,070

89.3%

387,518

481,053

93,535

24.1%

-163

-46.8%

1,302

1,000

-302

-23.2%

6,463

2.8%

415

2.90%

Economic Indicators Analysis

Year to date employment in was up over the same period in 2014 in utilities (400), transportation and warehousing (1,700), finance, insurance, real estate and leasing (400), professional, scientific and technical services (100), education services (700) information, culture and recreation (1,200), accommodation and food services (1,000), and public administration (1,000). Construction employment growth was substantial (900) owing to commercial and industrial activity (GTH, downtown office, K+S, and the stadium), more than offsetting a slowdown in residential construction.

•

Continued low oil prices has impacted resource employment.

This sector saw a 50% (-1,300) decrease in year to date employment. Further drags on employment occurred in the lower paying sectors of trade wholesale and retail employment (-1,700) as well as business, building and other support services (-400) and health (-1,600). More worrisome was the year to date drop of 500 manufacturing jobs.

•

The average year to date unemployment rate remains low at 4.5%. However, employers have a slightly larger available labour pool to draw from.

•

Both residential permits and housing starts dropped sharply as the current market struggled to absorb the record housing starts in 2013.

•

Industrial and Institutional activity remains strong representing substantial business opportunities in the region, offsetting drops in the residential sector.

•

With low inflation, interest rates are not expected to increase for the bulk of 2015.

•

2014 Population was up 2.8% over 2013 on the strength of international in-migration and is expected to continue through 2015 with continued employment growth.

•

The Conference Board of Canada forecasts the Regina economy to grow by 2.9% in 2015. Although the pace of growth, while still positive, is slowing from 2014, it remains the third highest in Canada, behind only Kitchener-Waterloo and Halifax.

With stories of global economic retraction and a likely national recession abound, the picture in Regina is one of stable and steady growth despite a retrenchment in resource prices.

Regina’s story is one of diversification. While the economy has slowed, RROC and Praxis’s inaugural Impact Regina publication paints a picture of resilient and diversified Regina regional economy.

The benefit of economic diversification has never been more apparent. Regina’s economy is certainly dependent on the oil industry. Over 1000 people are directly or indirectly employed in the industry, with over 600 people commuting daily to southwest Saskatchewan. The oil industry contributes $1.9 billion to Regina’s GDP, and with average salaries over $90,000 the sector contributes to the region’s prosperity. The diversification story in our region is worth telling and is major factor behind the Regina advantage.

Regina boasts a diversified manufacturing sector with 6,500 employees in 17 different industries; with over $1.4B in GDP contribution, accounting for 5% of total employment in Regina, and sustaining 133 employers with over $6.8B in annual sales.

The Regina advantage is further evident in the finance sector, which employs 8,035 people and accounts for $1,196 million of the gross domestic product (GDP) in Regina. The insurance industry offers employment to 2,065 people and contributes $892 million to Regina’s GDP. Our Tourism industry employs 7,900 people and accounts for $272 million of Regina’s gross domestic product. Situated next to 46% of Canada’s arable land, Regina’s agribusiness sector employs almost 2,500 people – of which roughly 300 work in the food processing sector – and accounts for $467 million, or 2.9 per cent, of Regina’s GDP. Diversification is the Regina Advantage.

The economic indicators tell a nuanced story. Our economy has slowed; some sectors are suffering, while others are robust. In short, the indicators tell a story of diversification. They tell a story of the Regina advantage: •

Year to Employment growth (+1.2%) is still positive but shows signs of slowing.

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Impact Regina

•

Impact Regina The Province will also extend a 31.5 year, $100 million loan to the City of Regina. This loan will be primarily repaid through a facility fee that will be increased from $8 to $12 at Rider games.

Quarterly Feature Report Stadium Project At $278 million, the Stadium project is a major sustainer and creator of jobs in the construction sector. As one element of the Regina Revitalization Initiative (RRI) it is part of the largest redevelopment project in Regina’s history. The RRI has several components including the construction of the new stadium at Evraz Place and the Taylor Field site re-development. Relocating the stadium will free up the existing site at Taylor Field for a new housing development within minutes of Regina’s downtown.

Impact Regina

The new stadium is expected to cost $278 million.

Construction began in 2014 with completion in 2017.

The Provincial Government provided a grant of $80 million over four years. The City of Regina contributed $73 million and the Saskatchewan Roughriders will contribute $25 million through naming rights, sponsorships and other sources.

The City has planned to pay for the stadium for 30 years after construction wraps up in 2017. Over 30 years, $200 million is earmarked for maintenance and rehabilitation.

Using the SJ Research Services Regina economic impact model, the following impacts in Regina can be expected over the course of facility construction.

Beyond the expected impacts in the construction industry, substantial impacts can be expected in manufacturing, wholesale trade, transportation and warehousing, information and cultural Industries, finance, insurance, real estate and rental and leasing, and professional, scientific and technical services. The spin-off impacts represent sizable business opportunities for the Regina region. Detailed impacts by industry are presented on the following page:

Gross Output Impact

Gross Domestic Product at Basic Prices

Employment Impact (jobs)

Labour Income Impact

Direct Impacts ($M)

209.1

69.9

795

37.0

Indirect Impacts ($M)

54.5

26.7

199

10.8

Induced Impacts $M

25.0

14.3

71

4.2

Total Impacts ($M)

288.6

110.9

1066

52.0

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Gross Output Impact

GDP @ Basic Prices Impact

Employment Impact (Positions)

Labour Income Impact

Crop and Animal Production

0.3

0.1

1

0.0

Forestry and Logging

0.0

0.0

0

0.0

Fishing, Hunting and Trapping

0.0

0.0

0

0.0

Support Activities for Agriculture and Forestry

0.0

0.0

0

0.0

Mining and Oil and Gas Extraction

5.3

3.6

4

0.4

Total Impacts ($M) Stadium Construction Phase

Utilities

1.0

2

0.3

210.1

70.2

799

37.2

Manufacturing

12.6

3.4

29

1.6

Wholesale Trade

7.1

4.3

34

1.9

Retail Trade

0.0

0.0

0

0.0

Transportation and Warehousing

4.5

2.5

21

1.4

Information and Cultural Industries

1.7

1.0

10

0.5

Finance, Insurance, Real Estate and Rental and Leasing

22.9

15.5

43

3.1

Professional, Scientific and Technical Services

11.7

7.6

90

4.4

Administrative and Support, Waste Management and Remediation Services

0.8

0.5

14

0.3

Educational Services

0.0

0.0

0

0.0

Health Care and Social Assistance

0.6

0.3

5

0.2

Arts, Entertainment and Recreation

0.0

0.0

0

0.0

Accommodation and Food Services

0.0

0.0

0

0.0

Other Services (Except Public Administration)

0.0

0.0

0

0.0

Operating, Office, Cafeteria and Laboratory Supplies

2.9

0.0

0

0.0

Travel, Entertainment, Advertising and Promotion

1.9

0.0

0

0.0

Transportation Margins

3.2

0.0

0

0.0

Non-Profit Institutions Serving Households

0.0

0.0

0

0.0

Government Sector

1.4

0.9

12

0.7

288.6

110.9

1066

52.0

Total

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Impact Regina

1.7

Construction

About RROC At RROC, we are passionate about supporting investors to make the most of the opportunities in our region. We are an “investment concierge”, offering business intelligence ,path-finding to local resources, and introductions to government agencies as required.

RROC maintains a Strategic and Competitive Intelligence unit providing customized, confidential and free information for qualified investors, business, and stakeholders. To learn more about RROC’s sector strategy, programs, and services, please contact: David Froh, Vice President Regina Regional Opportunities Commission E: dfroh@reginaroc.com P: 306-789-5099 ext. 230

About Praxis Consulting Praxis consulting is Saskatchewan’s largest locally-based management consulting firm. Praxis works collaboratively with clients in the facilitation of growth and excellence, leveraging an unmatched wealth of experience across multiple sectors. Praxis strives to: •

Inform clients with market research and economic impact studies, providing relevant insights into various sectors and communities.

•

Strategize, developing custom solutions tailored to clients’ most unique and complex needs.

•

Execute strategic plans, portfolios and projects by facilitating internal project management, change management and communication capacity.

E: info@praxis-research-strategy.ca P: 306-545-3755