Economic Report Card
Understanding Location Quotient
February 2020
Executive Summary The Greater Regina Area labour market had a stellar 2019 with noteworthy increases in year-to-date employment, mostly part-time, and drops in both the number of unemployed and the unemployment rate. Although a single month may not indicate a trend, one month into 2020, employment is down sharply and unemployment is up, in line with other indicators. With the exception of commercial building permits, all other monthly indicators declined in December 2019. •
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Total employment in the Greater Regina Area was down -2.6% or -3,700 positions in January to December 2019 over the same period in 2018. These losses occurred entirely in full-time positions. Part-time employment advanced slightly by 200 positions. At the provincial level, year-to-date employment increased by 3,900 or 0.7%. Year-to-date employment in January 2020 was up over the same period in 2019 in Resource Extraction (200), Finance, insurance, real estate and leasing (2,300), Professional, scientific and technical services (2,200), Business, building and other support services (700), Accommodation and food services (100), and Other services (1,400). Year-to-date employment in January 2020 was down in Agriculture (-800), Utilities (-800), Wholesale and Retail Trade (-1300), Transportation and warehousing (-1900), Educational services (-2500), Health care and social assistance (-800), and Public administration (-100).
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Year-to-date January 2020 construction employment is down by 2,300 positions from the same period in 2019 in tandem with weak housing starts and residential building permit data.
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The average year-to-date unemployment rate advanced from 4.5% in January 2019 to 6.3% in January 2020. Year-to-date, the number of unemployed is up 2,600 in in January 2020 from in January 2019. With employment dropping by 3,700 over the same time period and the number of those of labour force age but not in the labour force increasing by 5,100, it can be assumed that the Regina Area is experiencing something of a “discouraged worker effect” where workers have withdrawn from actively seeking employment until prospects improve.
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Struggling with over supply and tighter mortgage qualification rules, December 2019, total year-to-date housing starts are down by -602 units or -52.9%. Year-to-date declines were widespread and across all sub-categories of starts: singles (-104 units or -29.5%), semi-detached (-56 units or -59.6%), row (-77 units or -39.9%), and apartment and other types (-365 units or -73.0%).
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December 2019 year-to-date building permits are down -9.5% over the same period in 2018. Sub sectors that posted increases were limited to: commercial (63.4%). During the same time period residential (-27.0%), Industrial (-34.0%), and institutional and governmental (-63.5%) all posted declines.
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The average year-to-date Housing Price Index Benchmark Price is down from $268,200 in January 2019 to $249,800 in January 2020.
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With inflation remaining in its target range, the Bank of Canada held its overnight rate steady at 1.75%, as expected, in its January 2020 rate announcement. The Bank’s policy statement recognized the slowdown in near term economic growth and a widening output gap. The Bank of Canada did not close the door on future rate cuts noting continued global trade tensions. The next scheduled date for announcing the overnight rate target is March 4, 2020.
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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 release of 2019 data is expected in February/ March 2020.
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The Conference Board of Canada forecasts Regina’s economy to post a 1.6 per cent real GDP gain in 2019, following a 1.5 percent increase in 2018.
Economic Indicators February 2020
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Understanding Location Quotient Introduction The Location Quotient is a commonly utilized economic analysis to determine the economic drivers of a region. This analysis helps us determine which industries are exporting and bringing in new wealth into the region, and which industries are providing services to exporting industries or meeting local demand. The results help us better understand and identify specializations in the local economy and identify growth opportunities that exist driven by the presence of an existing skilled labor pool or other resources such as suppliers, education, and/or infrastructure hubs in the region. When an industry has a value higher then 1, the industry is presumed to be exporting its goods and services. This analysis is a useful tool in a real estate market analysis as it helps identify future demand for real estate to meet needs of growing industries as well as its support industries. This can include planning to develop adequate office or warehouse space in addition to retail and residential real estate. This analysis is also helpful when forecasting population growth, rental rate growth, and vacancy rates.
Method Location quotients can be calculated for all industries to determine whether the local economy has a greater share of each industry than expected when compared to a reference economy. In this case, comparing the Regina Region to the Canadian national average. Location Quotient = Regional Industry Concentration (Regina and Region) / National Industry Concentration (Canada)
The Result Unsurprising, the following industries are identified as important in supporting our growth: - Agriculture, -
Forestry, fishing, mining, quarrying, oil and gas, and
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Transportation and warehousing
Specifically, these supporting industries are helping our region in developing specializations in industries such as: - Utilities, -
Finance and Insurance,
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Information, culture and recreation,
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Business, building and other support services, and
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Professional, scientific and technical services
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They maintain their ability to be strong wealth generators for the local economy. As well, new specializations have emerged since 2001. First and foremost, the movement from a location quotient of 0.78 to 1.01 in manufacturing. With manufacturing employment up 4.8% so far in 2019, this trend is expected to continue. We have also seeing specializations with Construction, Health care and Social assistance.
At the same time, drops in location quotients for industries dominated by the crown sector and general government, suggests that a more diversified local economy and private sector local economy has emerged over the previous 17 years. In addition to highlighting changes in local industry, new growth opportunities may exist for the base and related industries due to the presence of an existing skilled labor pool or other resources such as suppliers, education, and/or infrastructure hubs in the region.
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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.
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Research: Information gathering and data analytics.
Results: Cascading strategy and culture within the organization.