Impact Regina April 2018
Executive Summary The Regina economy continues to grow in the first three months of 2018, although at a slowing pace. The bulk of indicators (yearto-date employment, residential construction, population, and gross domestic product) posted advances over the previous year, however, weaknesses were observed building permits (primarily non-residential), year over year employment, and in non-apartment housing starts.
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February 2018, total year-to-date housing starts are up by 157 units or 54.7%. Year-to-date increases were observed in row housing (14 units or 58.3%) and apartment and other types (237 units or 260.4%). Year-to-date declines were noted in singles (-30 units or -31.9%) and semi-detached (-64 units or -82.1%). It should be noted that much of the year-to-date increase was a result of a 250 rental apartment start surge in January 2018.
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Total employment in the Greater Regina Area was up 0.7% or 1,033 positions in January to March 2018 over the same period in 2017. At the provincial level, year-to-date employment dropped by 1600 or -0.3% over the same time period. Despite growth in year-to-date Regina employment, year over year employment (March 2018 vs March 2017) dropped by 300 persons.
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February 2018 year to date building permits are down -13.2% over the same period in 2017. Sub sectors that posted increases were: residential (8.5%) and industrial (77.7%). During the same time period commercial (-13.2%) and institutional and governmental (-80.8%) posted declines.
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Year-to-date employment in March 2018 was up over the same period in 2017 in Utilities (400), Manufacturing (800), Finance, insurance, real estate and leasing (900), Business, building and other support services (2300), Educational services (100), Information, culture and recreation (600 ), Other services (1100), and Public administration (700 ).
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Year-to-date employment in March 2018 was down in Agriculture (-600), Resource Extraction (-100), Wholesale and Retail Trade (-300), Transportation and warehousing (-1700), Professional, scientific and technical services (-2000), Health care and social assistance (-1900), and Accommodation and food services (-400).
Despite low inflation, the Bank of Canada’s first interest-rate hike in seven years occurred in July, 2017 followed by a second hike to 1.0 percent in September and a further hike to 1.25% on January 17, 2018. Higher rates are expected to help to cool the housing market and slow debt-fueled purchases. However, March 2018 commentary by the Bank of Canada suggest the pace of interest rates hikes may become more gradual as the economy expands without triggering inflation.
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2017 Regina Census Metropolitan Area population was up 2.4% over 2016 to 253,220 on the strength of international and intraprovincial migration. This can be expected to continue through 2018 with continued employment growth spurring further in-migration.
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After a weak performance in 2017, construction employment bounced back in the first three months of 2018. Year-to-date March construction employment is up by 900 positions from the same period in 2017 on the strength of residential and Regina by-pass construction.
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The Conference Board of Canada forecasts Regina’s economy to post a 2.2 per cent real GDP gain in 2018, following a 1.5 percent increase in 2017.
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The average year-to-date unemployment rate remains low at 5.0%, down from 5.5% in March 2017. Year to date, the number of unemployed is also down from 8,000 in March 2017 to 7,400 in March 2018.
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Economic Indicators April 2018
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2017 in review Executive Summary The Regina economy in 2017 saw the bulk of indicators (employment, residential, commercial and industrial construction, population, gross domestic product) posting advances over the previous year. The only areas of weakness observed were in government/institutional building permits. •
The latest population counts show the Greater Regina Area (GRA) 2017 population was up 2.4% over 2016 to 253,220 on the strength of international and interprovincial migration.
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Total employment in the GRA was up 0.9% or 1,225 positions in 2017 over 2016. At the provincial level, year to date employment dropped by 900 or 0.2% over the same time period.
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Employment growth was positive in 2017 in agriculture, manufacturing, professional, scientific and technical services, business, building and other support services, healthcare, and public administration.
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The unemployment rate remains low at 5.1% dropping from 5.3% in 2017.
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2017 building permits were up 3.1% over 2016. Most sub sectors posted increases with only government/institutional permits showing a decline.
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Total housing starts in the GRA in 2017, at 1,923 units, were up from 2016 by 23% with increases in semi-detached, row houses, and apartment units. Only single detached units posted a small decline of 0.3%
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The outlook for 2018 is for continued positive real Gross Domestic Product (GDP) growth and at a slightly slower pace than in 2017. Indicator
2016
2017
Chg
%Chg
Population (persons)
247,192
253,220
6,028
2.4%
Employment
139,300
140,525
1,225
0.9%
7,733
7,583
-150
-1.9%
Unemployment Unemployment Rate (%)
5.3
5.1
-0.1
-2.7%
Participation Rate (%)
73.0
72.8
-0.2
-0.2%
Employment Rate (%)
69.2
68.7
-0.5
-0.7%
681,303
702,627
21,324
3.1%
1,563
1,923
360
23.0%
13,959
14,174
215
1.5%
Building Permits Total ($000s) Housing Starts Total (Units) Gross Domestic Product (2007 $M)
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Analysis Population and Demographics 2017 population was up 2.4% over 2016 to 253,220 on the strength of international and interprovincial migration. This can be expected to continue through 2018 with continued employment growth spurring further in-migration.
Sources of Population Growth Driving population growth since 2011/2012 has been international in-migration (immigration), and to lesser extents the natural increase and migration from within the province (net intra-provincial migration). Migration from other provinces (net inter-provincial migration) has been either low or negative. Of concern for 2018 is the modest slowdown in immigration (5,235 in 2015/2016 to 4,947 in 2016/2017) coupled with a drop in net interprovincial migration. These two components, along with the natural increase, have been the largest factors of population increase since 2011/2012. 2011/2012
2012/2013
2013/2014
Births
2902
3016
Deaths
1651
1743
Immigrants
4102
Emigrants Returning emigrants Net temporary emigrants
2014/2015
2015/2016
2016/2017
3058
3115
3160
3215
1738
1754
1780
1801
3472
3905
3550
5235
4947
246
135
242
209
184
185
195
116
183
165
172
172
53
42
56
48
42
42
Net interprovincial migration
410
-76
-669
-1308
-1279
-1585
Net intraprovincial migration
808
646
1139
1097
1009
1009
Net non-permanent residents
418
953
49
-456
318
298
Labour Market Key among the labour market indicators is the increase in the total number of people employed in the GRA. Total employment was up 0.9% or 1,225 positions in 2017 over 2016. At the provincial level, year to date employment dropped by 900 or 0.2% over the same time period. Within the strategic sectors in the GRA (resource extraction, metal fabrication, machinery manufacturing, finance and insurance, agribusiness, and tourism) employment growth was largely positive. 2017 employment was up in agriculture (300), manufacturing (1,800), professional,
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scientific and technical services (600), business, building and other support services (100), healthcare (300), and public administration (700). While construction is primarily a supporting sector, employment in this industry remains suppressed, down by 900 positions from 2016. Infrastructure projects, such as the Regina bypass, and new home construction are not compensating for position losses as stadium and K+S work wound down earlier this year.
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The 2017 unemployment rate remains low at 5.1%, down from 5.3% in 2016. Driving the decrease was the small drop of 150 persons from the ranks of the unemployed. The decline in the number of unemployed while the number working increased was responsible for the small drop in the participation rate: the number of employed plus unemployed divided by the population aged 15 years and over. During the same period, the employment rate declined slightly as employment growth did not keep pace with population growth.
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Construction Construction in 2017 was largely positive. While construction employment declined with a drop off in major project construction, residential and industrial/commercial permits and starts well exceeded 2016 levels of activity. New housing starts are a prevailing indicator of a region’s economic health. This one indicator has powerful multiplier effect through the economy and is typically used to derive estimates for other consumer-based indicators. People buying new homes tend to spend money on other consumer goods such as furniture, lawn and garden supplies, and home appliances. Total housing starts in the GRA in 2017, at 1,923 units, were up from 2016 by 23% or 360 units. Increases were widespread across semi-detached, row houses, and apartment units. Single detached units posted a modest decline of 0.3%
3500 3000 2500 2000 1500 1000
0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2013 2014 2015 2016 2017
500
The City of Regina saw an increase in construction of new commercial buildings in 2017. Forty-nine new commercial building permits were issued with a total value of $101 million as compared to 36 commercial building permits valued at $78 million issued in 2016. 2017 permits were up 3.1% over 2016. Most sub sectors posted increases: residential, a leading indicator of housing starts (9.9%), industrial (17.7%), commercial (36.7%), with only government/institutional permits showing a decline (-40.5%).
Outlook for 2018 According to the Conference Board of Canada’s Winter 2018 Metropolitan Outlook, the Regina economy will grow in real terms by 2.2% in 2018. Employment growth will slacken slightly to 0.4%. However, the unemployment rate will increase slightly to 5.8%. Despite a forecasted 2% increase in population, the Conference Board forecasts total housing starts to drop to 1,572 units as the market absorbs the 2017 building spree. Overall, according to the Conference Board, GRA will see moderate growth with continued modest increases in oil, potash, and various crop prices.
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About EDR
About Praxis
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.
Economic Development Regina Inc. (EDR) is the economic development agency for the Greater Regina Area (GRA).
www.economicdevelopmentregina.com
Praxis Consulting is Saskatchewan’s largest locally-based management consulting firm.
Research: Information gathering and data analytics.
Results: Cascading strategy and culture within the organization. www.praxis-research-strategy.ca