Impact Regina August 2017
Executive Summary Counter to provincial trends, the Regina economy continues to grow, with the bulk of indicators (employment, residential, commercial and industrial construction, population, gross domestic product) posting advances over the previous year. The only soft spot observed was in government/institutional building permits. •
•
Impact Regina
•
•
•
The average year-to-date unemployment rate remains low at 5.2%, down from 5.3% in July 2016. Year to date, number of unemployed is down by 100 people from the same period in 2016.
•
Total employment in the Greater Regina Area was up 1.4% or just under 2,000 positions in January to July 2017 over the same period in 2016. However, July 2016 to July 2017 employment growth, although still positive at 400 positions, has slowed sharply from the first 5 months of the year.
Total housing starts are up by 385 units or 65.6%, rising from 587 units in January to June 2016 to 972 units in January to June 2017. Increases were widespread across singles, semi-detached, row houses, and apartment units.
•
Year-to-date employment in July 2017 was up over the same period in 2016 in agriculture (400), manufacturing (1,600), transportation and warehousing (300), professional, scientific and technical services (1,900), education services (100), healthcare (900), accommodation and food services (500), and public administration (800).
January to June 2017 year to date building permits are up 8.3% over the same period in 2016. Most sub sectors posted increases: residential (31.7%), industrial (83%), commercial (73.2%), with only and government/institutional permits showing s a decline (-56.3%).
•
Despite low inflation, the Bank of Canada’s first interest-rate hike in seven years occurred in July, 2017. The central bank raised its overnight lending rate by a quarter-percentage-point, to 0.75 per cent from 0.5 per cent in response to higher than anticipated growth. Higher rates are expected to help to cool the housing market and slow debtfueled purchases.
•
2016 population was up 2.6% over 2015 to 247,224 on the strength of international and intraprovincial migration. This can be expected to continue through 2017 with continued employment growth spurring further in-migration.
•
The Conference Board of Canada forecasts Regina’s economy to post a 1.8 per cent real GDP gain in 2017, following 1.3 percent growth in 2016.
Year-to-date employment in July 2017 was down in resource extraction (-200), utilities (-200), wholesale and retail trade (-100), finance, insurance, real estate and leasing (-1,200), business, building and other support services (-800), information, culture and recreation (-500), and other services (-700). Construction employment remains suppressed. Year-to-date July construction employment is down by 800 positions from the same period in 2016. With stadium and K+S work complete, other activity such as the Regina bypass and new home construction are not of sufficient scale to absorb position losses
www.economicdevelopmentregina.com
Economic Indicators August 2017 Month to Month
Employment Unemployment Rate (%)
Consumer Price Index (2002=100) Housing Starts Total (Units) Building Permits Total ($000s)
July 2016
July 2017
141,200
141,600
400
5.5
5.4
-0.1
June 2016
June 2017
134.2
134.7
0.5
170
185
121,214
% Chg
Chg
% Chg
July 2016
July 2017
0.3%
138,214
140,171
1,957
1.4%
-1.8%
5.3
5.2
-0.1
-2.1%
June 2016
June 2017
0.4%
132.8
134.3
1.5
1.1%
15
8.8%
587
972
385
65.6%
123,265
2,051
1.7%
339,339
367,405
28,066
8.3%
27,690
69,623
41,933
151.4%
147,484
194,177
46,693
31.7%
93,524
53,642
-39,882
-42.6%
191,855
173,228
-18,627
-9.7%
2015
2016
240,868
247,224
2016
2017f
14,169
14,426
Building Permits Non-Residential ($000s)
Population (persons) July 1
Gross Domestic Product (2007 $M)
Negative Trend Positive Trend 6,356
2.6%
257
1.8%
No Significant Change
Sources: Statistics Canada Cansim 2820128, 0270034, 326-0020, 0260003, 0510056, and Conference Board of Canada Metropolitan Outlook Autumn 2016. Note: All data presented above is raw/not seasonally adjusted.
www.praxis-research-strategy.ca
Impact Regina
Building Permits Residential ($000s)
Chg
Year to Date
Demographic Analysis 2006 to 2016 Introduction On May 3, 2017 Statistics Canada released age and sex breakdowns of the 2016 Census population. This data displays distributions by broad age groups for various levels of geography, for example Canada, provinces and territories, census metropolitan areas, census agglomerations and census subdivisions. With the release of this data it is possible to prepare an updated population pyramid for the Greater Regina Area (GRA). A population pyramid, also called an age pyramid or age picture, is a graphical illustration that shows the distribution of various age groups in a population (typically that of a country or region), which forms the shape of a pyramid when the population is growing. This tool can be used to visualize sex and age composition of a particular population. Visualizing and understanding the population breakdown has big implications on business and planning for the future. Those implications range from participation rates to a demand for new services and products catering toward the retired Baby Boomer generation. The changes described in the following offer economic challenges as well as an opportunity.
Impact Regina
2016 Regina CMA Population by Age and Gender 85 and Older 80 to 84 years 75 to 79 years 70 to 74 years 65 to 69 years 60 to 64 years 55 to 59 years 50 to 54 years 45 to 49 years 40 to 44 years 35 to 39 years 30 to 34 years 25 to 29 years 20 to 24 years 15 to 19 years 10 to 14 years 5 to 9 years 0 to 4 years (10,000)
(8,000)
(6,000)
(4,000)
(2,000)
female
www.economicdevelopmentregina.com
0
male
2,000
4,000
6,000
8,000
10,000
2011 Regina CMA Population by Age and Gender 85 and Older 80 to 84 years 75 to 79 years 70 to 74 years 65 to 69 years 60 to 64 years 55 to 59 years 50 to 54 years 45 to 49 years 40 to 44 years 35 to 39 years 30 to 34 years 25 to 29 years 20 to 24 years 15 to 19 years 10 to 14 years 5 to 9 years 0 to 4 years (10,000)
(8,000)
(6,000)
(4,000)
(2,000)
female
0
2,000
4,000
6,000
8,000
10,000
male
2006 Regina CMA Population by Age and Gender
(10,000)
(5,000)
0
female
5,000
10,000
male
www.praxis-research-strategy.ca
Impact Regina
85 and Older 80 to 84 years 75 to 79 years 70 to 74 years 65 to 69 years 60 to 64 years 55 to 59 years 50 to 54 years 45 to 49 years 40 to 44 years 35 to 39 years 30 to 34 years 25 to 29 years 20 to 24 years 15 to 19 years 10 to 14 years 5 to 9 years 0 to 4 years
Analysis Population change is a key component in determining economic outcomes. GRA’s demographics changed over time and demographic changes, occurring at the national level most likely, are not directly applicable. This section highlights changes in GRA’s demographics. GRA’s age and gender structure continued to evolve with the overall population growing by 21.3%, between 2006 and 2016. This generally implies more people in the various age and gender groups, however, on a percent distribution basis there were changes in the composition of the area’s age and gender makeup. The GRA’s Population Pyramid, comparing the percent shares by single years of age and gender between 2006 and 2016, highlights the changes that have occurred in the last ten years. Over the last ten years, there was a small reduction in the concentration of persons aged 19 and under, moving from 25.4% to 24.4%. The percentage of 20 to 64 year olds (the working age population) moved from 61.4% in 2006 to 62.6% in 2011, and then dropped slightly to 62% in 2016. Meanwhile the concentration of those aged 65+ moved from 13.2% to 13.6%. Overall the average/median age of the population was 37.5 years in 2006 versus 38.4 years in 2016. Baby Boomers, born in 1947 to 1966, currently aged 50 to 69, were the result of a sudden rise in birth rates following WWII. Boomers are currently an important topic due to the economic and social impacts of their retirement and ageing and moved from 21% to 23.7% of total population since 2006. Generation X, born in 1967 to 1979, now aged 37 to 49, are comprised of the “baby bust” group. This group moved from 22.3% to 19.8% of the total regional population over the last ten years.
Impact Regina
Generation Y, born in 1980 to 1995, currently 21 to 36, includes the children of the boomer generation and are often referred to as “Millennials”. This “echo of boom” is smaller than the boomer generation and moved from 21.5% of the total population in 2006 to 22.9% in 2016, mostly on the strength of international in-migration. Generation Z born after 1996 and now aged zero to 20, were born after the advent of the World Wide Web and into an age of advanced consumer technology. This population, as noted above, moved from 25.4% to 24.4% of total population in the GRA over the last ten years.
Implications for Business The on-going ageing of the GRA’s population is expected to have significant consequences as a large population cohort, the Boomers, leaves the labour force. Even though participation rates of older residents can be expected to rise over time, they will still be significantly lower than those of younger people. As baby boomers age, they will contribute to proportionately fewer people participating in the labour force. This will cause a decline in the overall participation rate for the GRA, unless working age population is replaced by in-migration. This, to some extent, is already occurring through inter-national in-migration, which now makes up the largest component of population growth in the GRA.
www.economicdevelopmentregina.com
Components of population growth
2009/2010
2010/2011
2011/2012
2012/2013
2013/2014
2014/2015
2015/2016
Births
2770
2899
2902
3053
3130
3188
3235
Deaths
1618
1692
1651
1682
1703
1721
1738
Immigrants
2367
2721
4102
3472
3905
3551
4684
Emigrants
133
174
246
134
228
196
197
Returning emigrants
155
156
195
117
157
141
141
40
60
53
42
57
47
47
Net interprovincial migration
229
-69
410
-76
-669
-1308
-1140
Net intraprovincial migration
302
735
808
646
1139
1097
1097
Net non-permanent residents
238
144
418
936
60
-456
321
-378
-432
-
-
-
-
-
Net temporary emigrants
Residual deviation
Over the next decade, and beyond, the GRA can expect a growing senior as well as an increasing ethnically diverse population. Changes in these two important demographics represent a number of challenges but also significant longterm marketing opportunities. An ageing population could lead to a shortage of workers and push up wages causing wage inflation. Alternatively, firms may have to respond by encouraging more people to enter the workforce, through offering flexible working practices. An increase in the numbers of retired people will create a bigger market for goods and services linked to older people (e.g. retirement homes). The ageing population is both an economic challenge and a business opportunity. Companies need to tailor their marketing strategies to be more inclusive of all ages. Those businesses that adapt to population ageing will succeed. Potential business opportunities include: Activity holidays. Baby boomers are likely the only age group to increase the average number of holidays they take every year. Demand is growing for activity-based trips (golf, etc).
•
The fitness industry is also poised to capture the opportunity that the 65+ market presents.
•
With the 65+ now owning considerable housing wealth, they are key players in the property market. Including downsizing, vacation property, cottages, retirement villages, private care services, and care-provider services.
•
The financial services industry can become the largest beneficiary of all, providing products such as pensions, insurance and equity release.
International in-migrants tend to be younger than the general population and have larger families. In addition, they tend to cluster in large cities. However, second and third generation migrants also seem to be shifting towards suburbs and semi-rural locations. From a more encompassing, economic point of view, migrants contribute to the prosperity of their host countries, helping fill employment gaps when necessary and rejuvenating ageing populations and workforces. This, along with ethnic minority consumers’ rising incomes, is positively impacting shopping behaviour within host countries. A successful economic development strategy should accommodate increased population diversity by providing products and services in appropriate, easily understood languages.
www.praxis-research-strategy.ca
Impact Regina
•
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.
www.economicdevelopmentregina.com
www.praxis-research-strategy.ca
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.
Research: Information gathering and data analytics.
Results: Cascading strategy and culture within the organization.