Impact Regina May 2017
Executive Summary
Impact Regina
Despite weak resource prices, the Regina economy continues to expand with all indicators, except total building permits, posting advances over the previous year: •
Total employment in the Greater Regina Area was up 2.1% or 2,850 positions in January to April 2017 over the same period in 2016.
•
Year-to-date employment in April 2017 was up over the same period in 2016 in agriculture (300), manufacturing (1,100), wholesale and retail trade (400), transportation and warehousing (1,000), professional, scientific and technical services (1,600), education services (400), healthcare (1,800), accommodation and food services (700), and public administration (1,200).
•
Year-to-date employment in April 2017 was down in resource extraction (-600), utilities (-100), finance, insurance, real estate and leasing (-1,300), business, building and other support services (-1,600), information, culture and recreation (-400), and other services (-1,000).
•
Construction employment remains suppressed but the slide is leveling off. Year-to-date construction employment is down by 400 positions year to date over 2016. Infrastructure projects, such as the Regina bypass, continue to stimulate the sector as stadium work winds down.
•
The average year-to-date unemployment rate remains low at 5.3%, up only 0.2 percentage points from 5.1% in April 2016. Of note this month, the number of unemployed (average year to date) was almost unchanged from April 2016.
•
Total housing starts are up by 162 units or 68.9%, rising from 235 units in January to February 2016 to 397 units in January to March 2017. Increases were
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widespread across singles, semi-detached, row housing and apartment units. •
2017 year to date building permits are down 5.8% from March 2016. Increases in residential (6%) and industrial (28.9%) did not offset drops in commercial (-14.3%) and government/institutional (-27.8%) permits.
•
With continued low inflation, interest rates are not expected to increase through much of 2017.
•
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.
Economic Indicators March 2017 Month to Month
Employment Unemployment Rate (%)
Consumer Price Index (2002=100) Housing Starts Total (Units) Building Permits Total ($000s)
April 2016
April 2017
136,200
140,400
4,200
5.9
4.9
-1
Mar 2015
Mar 2016
132.9
133.7
0.8
76
110
47,334
% Chg
Chg
% Chg
April 2016
April 2017
3.1%
136,850
139,700
2,850
2.1%
-16.9%
5.1
5.3
0.2
2.9%
Mar 2015
Mar 2016
0.6%
132
133.8
1.8
1.3%
34
44.7%
235
397
162
68.9%
48,788
1,454
3.1%
122,035
114,978
-7,057
-5.8%
27,872
32,163
4,291
15.4%
61,092
64,788
3,696
6.0%
19,462
16,625
-2,837
-14.6%
60,943
50,190
-10,753
-17.6%
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.
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Impact Regina
Building Permits Residential ($000s)
Chg
Year to Date
The Public Sector and the Regina and Provincial Economies Introduction Along with passing legislation, the public sector also manages and funds hospitals, other healthcare and the school/ college/university systems. Hospitals and secondary schools offer unique opportunities for any local economy, as they are not usually subject to the economic vagaries of boom and bust cycles. Additionally, general government is a major purchaser of goods and services within any regional economy and typically offers well-paying and relatively stable employment, the majority of the wages of which are spent within the province and communities. Finally, economic development relies greatly upon infrastructure development, including education, also provided by the public sector. The Public Sector Defined
Impact Regina
Statistics Canada conducts a monthly labour force survey which, beyond the major indicators, also surveys for employment by detailed breakdowns by demographic characteristics, industry and occupation, job tenure, and usual and actual hours worked. Survey respondents are asked about the general nature of the business carried out in the establishment where the person worked (main job only). Legislative activities, taxation, national defense, public order and safety, immigration services, foreign affairs and international assistance, and the administration of government programs are activities that are purely governmental in nature. Labour force survey employment by industry results are presented below for both Regina and Saskatchewan for 2016.
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Employment by Industry - Labour Force Survey Regina and Saskatchewan 2016
Regina
Province
% of Total Regina
% of Total Province
800
41,100
0.6%
7.2%
Forestry, fishing, mining, quarrying, oil and gas
1,700
25,100
1.2%
4.4%
Utilities
2,500
6,900
1.8%
1.2%
12,200
51,300
8.8%
9.0%
6,400
25,700
4.6%
4.5%
22,500
88,300
16.2%
15.5%
Agriculture
Construction Manufacturing Wholesale and retail trade Transportation and warehousing
5,400
27,900
3.9%
4.9%
11,200
28,600
8.0%
5.0%
Professional, scientific and technical services
9,400
28,100
6.7%
4.9%
Business, building and other support services
3,400
13,000
2.4%
2.3%
Educational services
8,600
40,900
6.2%
7.2%
Health care and social assistance
20,600
78,700
14.8%
13.8%
Information, culture and recreation
7,700
20,400
5.5%
3.6%
Accommodation and food services
9,700
38,100
7.0%
6.7%
Finance, insurance, real estate, rental and leasing
Other services (except public administration) Public administration Total employeed, all industries
6,100
25,000
4.4%
4.4%
11,000
29,400
7.9%
5.2%
139,300
568,500
100.0%
100.0%
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Impact Regina
Notable among the data above is Regina’s low presence in primary (agriculture and resource extraction) industries. This is not surprising given GRA’s primarily urban make up. Regina also differs significantly in finance and insurance employment from the provincial share of the total. It should be noted that this industry would include Saskatchewan Government Insurance. Finally, Regina has 7.9% of its total employment in Public Administration versus 5.2% for the province which is not a significant difference in the order of magnitude that is typically perceived.
Employment by Industry - Canadian Productivity Accounts- Regina and Saskatchewan 2016 Crop and Animal Production Forrestry and Logging Fishing, Hunting and Trapping
Province
% of Total Regina
% of Total Province
773
30,317
0.6%
5.3%
-
377
0.0%
0.1%
-
67
0.0%
0.0%
27
1,406
0.0%
0.2%
Mining and Oil and Gas Extraction
1,700
19,847
1.2%
3.5%
Utilities
2,500
2,665
1.8%
0.5%
12,200
58,865
8.8%
10.4%
Manufacturing
6,400
26,422
4.6%
4.6%
Wholesale Trade
4,736
24,543
3.4%
4.3%
17,764
68,281
12.8%
12.0%
Transportation and Wharehousing
5,400
32,000
3.9%
5.6%
Information and Cultural Industries
4,951
8,601
3.6%
1.5%
Support Activities for Agriculture and Forestry
Construction
Retail Trade
Finance, Insurance, Real Estate, Rental and Leasing
11,200
29,783
8.1%
5.2%
Professional, Scientific and Technical Services
9,400
19,089
6.8%
3.4%
Administrative and Support, Wase Management and Remediation Services
3,296
19,118
2.4%
3.4%
373
1,907
0.3%
0.3%
Health Care and Social Assistance
6,110
14,455
4.4%
2.5%
Arts, Entertainment and Recreation
2,749
7,337
2.0%
1.3%
Accomodation and Food Services
9,700
39,180
7.0%
6.9%
Other Services (Except Public Administration)
3,253
18,641
2.3%
3.3%
Non-Profit Institutions Serving Households
2,847
17,792
2.0%
3.1%
33,716
127,808
24.2%
22.5%
139,096
568,500
100.0%
100.0%
Educational Services
Impact Regina
Regina
Government Sector Total
Similar conclusions to the industrial make up of Regina versus the province can be drawn from the CPA methodology: The relative lack of primary sector employment in the GRA, the additional finance and insurance jobs in the GRA, and the not significant surplus of public sector employment as a % of total in GRA versus the province (24.2% against 22.5% in the province).
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The Impact of the GRA Public Sector on the Regina and Provincial Economies Using provincial output by industry per employee by industry in the GRA, the direct value of the CPA defined public sector is approximately $4.2 billion or 14% of the total GRA economy. Although this figure appears significant, it does not include indirect employment, wage, and profit impacts on supplying sectors and the impact of spending of wages and salaries by both the public sector and those in supplying industries. To more fully expand the analysis to include these, a customised economic model of the GRA was developed. Total impacts of the GRA public sector on the GRA economy are presented below:
GRA Impacts of the GRA Public Sector Direct Impacts ($M)
Gross Output Impact
Gross Domestic Product at Basic Prices
4,228.5
2,726.8
Employment Labour Income Impact (jobs) Impact 33,716
2,247.6
Indirect Impacts ($M)
553.5
313.9
2,435
142.8
Induced Impacts ($M)
1,077.7
655.9
3,221
190.5
Total Impacts ($M)
5,859.7
3,696.6
39,372
2,581.0
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Impact Regina
Under this approach, the total impact of the GRA public sector is approximately 28% of total regional employment. Results above are annual direct, indirect, and induced impacts. Direct impact is the total initial expenditure, usually construction or operating outlays. Indirect impact is the secondary impact that includes inter-industry transactions; purchases of inputs from supporting industries. Induced impact is the additional impact from changes in household spending as industries modify labour input requirements in response to altered levels of demand for output. GDP measures net economic activity within a prescribed geographic area. It represents the payments made to final factors of production: labour, unincorporated business profits, and other operating surplus (corporate profits, interest income, inventory valuation adjustments, and capital consumption allowances). Gross domestic product excludes the value of intermediate goods and services used in production which are captured in gross output. Labour income includes wages, salaries, and employer contributions to pensions and benefit packages.
A similar exercise was conducted on GRA public sector direct expenditure of $4.2B on the provincial economy. Provincial results are outlined below:
Provincial Impacts of the GRA Public Sector
Gross Output Impact
Gross Domestic Product at Basic Prices
Employment Labour Income Impact (jobs) Impact
Direct Impacts ($M)
4,228.5
2,726.8
33,716
2,247.6
Indirect Impacts ($M)
1,351.1
804.1
8,606
390.9
Induced Impacts ($M)
2,818.4
1,702.8
17,153
699.6
Total Impacts ($M)
8,398.0
5,233.7
59,475
3,338.1
Notable is that the impact of GRA public sector spending accounts for about 10% of all provincial jobs. Rest of Province (ROP) impacts can be derived by subtracting Regina results from provincial results:
ROP Impacts of the GRA Public Sector
Impact Regina
Direct Impacts ($M)
Gross Output Impact
Gross Domestic Product at Basic Prices
Employment Labour Income Impact (jobs) Impact
-
-
-
-
Indirect Impacts ($M)
797.6
409.2
6,171
248.1
Induced Impacts ($M)
1740.7
1046.9
13,932
509.1
Total Impacts ($M)
2,538.3
1,537.1
20,103
757.2
Prominent in the results above are the persuasive impacts of Regina Public Sector spending outside of the GRA. These are from the GRA spending on supplies and services within the province but outside of the GRA. Secondly, there are additional impacts by GRA public sector employees out-shopping within the province but outside of the GRA.
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Implication for Business The public sector, including general government and government funded health and education, remains an important economic driver for the province and individual communities spread across Saskatchewan through purchases of goods and services as well as spending of wages and salaries. The public sector spends millions on goods and services annually throughout the province as well as directly supporting almost 130,000 positions in communities not limited to the Greater Regina Area alone.
Impact Regina
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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.
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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.