Impact Regina November 2016
Executive Summary The Regina economy continues to grow at a modest pace despite weak resource prices with most indicators, aside from construction, being positive: •
After a weaker start to the year, employment growth continued to surge in October, up 1.4% over the same month in 2015. This pushed October year-todate employment up 1.2% or 1,700 people over the same period last year.
•
Year to date employment was up over the same period in 2015 in resource extraction (400), wholesale and retail trade (3,100), finance, insurance, real estate and leasing (300), professional, scientific and technical services (1,100), healthcare (3,000), information, culture and recreation (900), and accommodation and food services (200).
Impact Regina
•
•
Year to date employment was down in agriculture (-100) utilities (-400), manufacturing (-600), transportation and warehousing (-2,200), business, building and other support services (-700), education services (-1,000), other services (-200), and public administration (-1,200). More worrisome was the 900 position drop in year to date construction employment, as industrial and commercial construction activity continues to decline. However, it should be noted that construction employment declines have slowed as residential construction draws even with 2015 levels. The average year to date unemployment rate remains low at 5.3%, up only slightly from 4.5% in October 2015. The addition of 1,400 (year to date) to the ranks of the unemployed during a period of positive job growth suggests that there is a continued disconnect between skills sets in the available unemployed labour force and demand for labour by employers. A further contributing factor
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would be a lack of opportunities elsewhere to drive out-migration of the unemployed. •
Total housing starts are down only slightly so far in 2016 over the first 9 months of 2015 and are showing signs of drawing even with 2015 activity. Single (+31.9%), semi-detached (+110%), and row housing (+55.1%) starts are up so far in 2016. However, a drop in apartment/condo construction (-42.7%) has driven total year-to-date housing starts down by 5.4% or 66 units. It should be noted, however, that 2015 apartment/condo starts include the Capital Point condominium project, with 144 units.
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Year to date residential building permits (a leading indicator of housing starts) are up 12.5% over the first 9 months of 2015 suggesting a continued resurgence in residential activity for the remainder of the year. However, a drop in year to date industrial (-72.3%) and commercial (-62.7%) permits, as stadium work winds up, pushed total year to date permits down by 16.4%.
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Interest rates are not expected to increase through much of 2016 with continued low inflation.
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2015 population was up 1.9 % over 2014 on the strength of international and intraprovincial migration. This can be expected to continue through 2016 with continued employment growth spurring continued in-migration. On average, between July 1, 2014 and June 30, 2015, Canada’s census metropolitan areas (CMAs) grew by 1.2 per cent.
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The Conference Board of Canada forecasts Regina’s economy to post a 0.7 per cent real GDP gain in 2016, following a 0.5 percent dip in 2015, the first drop since in 20 years.
Economic Indicators November 2016 Month to Month
Employment Unemployment Rate (%)
Consumer Price Index (2002=100) Housing Starts Total (Units) Building Permits Total ($000s)
Gross Domestic Product (2007 $M)
Oct 2015
Oct 2016
139,000
140,900
1,900
4.1
5.1
1
Sept 2015
Sept 2016
131.7
133.1
1.4
85
125
85,607
47,617
2014
2015
236,995
241,422
2015
2016f
14,075
14,235
% Chg
Chg
% Chg
Oct 2015
Oct 2016
1.4%
137,420
139,130
1,710
1.2%
24.4%
4.5
5.3
0.9
16.6%
Sept 2015
Sept 2016
1.1%
131.4
133
1.6
1.2%
40
47.1%
1,230
1,164
-66
-5.4%
-37,990
-44.4%
649,730
543,080
-106,650
-16.4%
4,427
1.9%
Negative Trend Positive Trend 160
0.7%
No Significant Change
Sources: Statistics Canada Cansim 2820128, 0270034, 326-0020, 0260003, 0510056, and Conference Board of Canada Metropolitan Outlook Spring 2016. Note: All data presented above is raw/not seasonally adjusted.
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Impact Regina
Population (persons) July 1
Chg
Year to Date
Detailed Labour Market Analysis Introduction The Labour Force Survey (LFS) provides estimates of employment and unemployment which are among the most timely and important measures of performance of the economy. LFS estimates are released only 10 days after the completion of data collection, usually on the first Friday of each month and are the first of the major monthly economic data series to be released. The LFS covers the civilian, non-institutionalized population 15 years of age and over and is conducted nationwide. There are several groups excluded from the survey’s coverage, these groups together represent an exclusion of less than 2% of the Canadian population aged 15 and over. High Level Findings/Summary - Regina Labour Market
Impact Regina
•
employment growth surged in the second and third quarters of 2016 •
the largest employment gains have been made in wholesale and retail trade and health care
•
the largest employment declines have been in public administration, transportation and warehousing, and construction
•
September 2016 year to date employment was up 1.2% compared to September 2015
•
similar to the national experience, significantly higher unemployment rates are occurring in younger age groups (e.g. 15-24)
•
employment has increased steadily since 2001
•
Regina is showing a remarkable resilience in weathering the current economic climate
2016 Year to Date The following table summarizes the year-to-date employment and unemployment data for Regina: Indicator
Sept 2015 ytd
Sept 2016 ytd
Chg
%Chg
Empoyment
137,244
138,933
1,689
1.2%
Labour Force
143,722
146,733
3,011
2.1%
6,478
7,822
1,344
20.8%
4.5
5.3
0.9
19.1%
Participation Rate (%)
72.8
73.0
0.2
0.3%
Employment Rate (%)
69.5
69.1
-0.3
-0.5%
Unemployment Unemployment Rate (%)
After a weaker start to the year, employment growth surged in the second and third quarters of 2016. Regina’s September year to date employment was up 1.2% or 1,689 people over the same period last year. After a weaker start to the year, employment growth surged in the second and third quarters of 2016. Regina’s September year to date employment was up 1.2% or 1,689 people over the same period last year.
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The average year to date unemployment rate remains low at 5.3%, up from 4.5% in September 2015 with the addition of 1,300 people (year to date) to the ranks of the unemployed during a period of positive job growth. This is in contrast to the 2014 experience where employment growth was more modest but sufficient to drive down unemployment and drop the unemployment rate to an extremely low 3.7%. In 2015 and 2016 a different phenomenon occurred.
Annual Changes in Key Labour Force Indicators 2014 to 2016 3 2.5 2 1.5 1 0.5 0 2014 chg
-0.5
Employment
2015 chg Unemployment
2016 ytd chg
Labour Force
Unemployment Rate
Employment growth was stronger in both years when compared to 2014, however, the number of unemployed grew. This suggests that the skill sets of the pool of unemployed do not match those required by employers as the growth in the number unemployed (despite employment growth) occurred at roughly the same time as resource prices began to weaken, in the second half of 2014 and new housing starts began to slow. It should also be noted that, with the exception of May and June 2016, growth in full-time employment outstripped the growth in part-time employment.
4 3 2 1 0 Jan-16
Feb-16
Mar-16
Apr-16
May-16
Jun-16
Jul-16
Aug-16
Sep-16
-1 -2 -3 -4 FT employment Growth
PT Employment Growth
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Impact Regina
Full and Part TimeEmployment Growth Regina CMA (000s) 5
Historical Perspective: 2001 to 2016 Regina’s current labour force statistics need to be viewed in relation to historical labour force statistics to assess the significance of the current trends. As seen in the graph below, employment has increased steadily since 2001 rising from 104,000 in 2001 to almost 139,000 in 2016 (year to date). Employment by Gender - Regina 160 140 120 100 80 60 40 20 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Employment (x 1,000) Both sexes 15 years and over Employment (x 1,000) Males 15 years and over Employment (x 1,000) Females 15 years and over
In addition, employment growth has been relatively well balanced across gender, however, employment among males has been slightly out stripping female employment since 2004. Employment by Age - Regina 80
Impact Regina
70 60 50 40 30 20 10 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 ytd Employment (x 1,000) Both sexes 15 to 24 years Employment (x 1,000) Both sexes 25 to 44 years Employment (x 1,000) Both sexes 45 years and over
Employment by age group shows little or no employment growth in the 15 to 24 age group, and softening in the 45 and over age group as baby boomers reach retirement age. The bulk of employment growth notably since 2010 has been within the 25 to 44 age cohort.
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The number of unemployed by gender is distributed much the same as employment by gender with a slightly higher preponderance among males. Unemployment by Gender - Regina 9 8 7 6 5 4 3 2 1 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 ytd Unemployment (x 1,000) Both sexes 15 years and over Unemployment (x 1,000) Males 15 years and over Unemployment (x 1,000) Females 15 years and over
Unemployment by age group tells a much more interesting story with larger numbers than expected in the 15 to 24 year old age group given the relatively lower numbers that this cohort accounts for in the entire labour force. Lower numbers of unemployed in the 45+ age group is expected given the number of baby boomers approaching retirement age. Unemployment by Age - Regina 4
3 2.5 2 1.5 1 0.5 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 ytd Unemployment (x 1,000) Both sexes 15 to 24 years Unemployment (x 1,000) Both sexes 25 to 44 years Unemployment (x 1,000) Both sexes 45 years and over
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Impact Regina
3.5
Regina’s unemployment rate has varied little since 2001 fluctuating between 5.6% and 3.7%. However, the rate has advanced almost 2 percentage points since 2013 (3.7%) to its current year to date figure of 5.3%. Typically, outmigration of unemployed maintains a low unemployment rate, however, in 2015/2016 this is not occurring. Lack of opportunities in Alberta is considered a contributing factor. Historically the rate has been higher among males than females but both rates following the trend of the overall rate. Unemployment Rate by Gender - Regina 7 6 5 4 3 2 1 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 ytd Unemployment rate (%) Both sexes 15 years and over Unemployment rate (%) Males 15 years and over Unemployment rate (%) Females 15 years and over
The unemployment rate by age group mirrors that of the national experience with significantly higher unemployment rates occurring in younger age groups. Also of note is the sharper increase in the rate for the 15 to 24-year age cohort over the course of 2015 and 2016. Unemployment Rate by Age - Regina 14
Impact Regina
12 10 8 6 4 2 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 ytd Unemployment rate (%) Both sexes 15 to 24 years Unemployment rate (%) Both sexes 25 to 44 years Unemployment rate (%) Both sexes 45 years and over
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Employment by industry in the Regina CMA is collected across 16 industries of sizes varying from 1,000 in agriculture and 20,000 health care. As such, employment growth by industry can be presented on a single graph as an index relative to 2001 levels. Employment By Industry Regina CMA Index 2001 = 100
400
350
300
250
200
150
100
50
0 2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Agriculture
Resource Extraction
Utilities
Construction
Manufacturing
Wholesale and retail trade
Transportation and warehousing [48-49]
Finance, insurance, real estate, rental and leasing
Professional, scientific and technical services
Business, building and other support services
Educational services
Health care and social assistance
Information, culture and recreation
Accommodation and food services
Other services (except public administration)
Public administration
2014
2015
2016 ytd
Clear among the trends in the above graph is employment growth, relative to 2001 in utilities, construction, health care, and to a lesser extent, resource extraction. It should be noted that resource extraction employment peaked in 2014 with oil prices, declined significantly in 2015 and is rebounding so far in 2016 but is unlikely to return to 2014 levels this year. In terms of actual individuals working, the graph below shows the largest changes in employment occurring in health care, construction, and wholesale and retail trade. Agriculture and public administration experienced small declines.
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Impact Regina
Employment by Industry - Change from 2001 (000s) 9 8 7 6 5 4 3 2 1 0 -1
So far in 2016, the largest employment gains have been made in wholesale and retail trade and health care while public administration, transportation and warehousing, and construction lost jobs. Employment by Industry - Ytd Change from 2015 (000s) 4.00 3.00 2.00 1.00 0.00 -1.00 -2.00 -3.00
Inter-Jurisdictional Comparison
Impact Regina
The Regina economy, with less reliance on resource prices, is showing a remarkable resilience in weathering the current economic climate, relative to Saskatoon and the province, as a whole. While both Saskatoon and the province are experiencing year to date drops in employment, employment in Regina continues to grow. Although the gain in the number of unemployed in Regina continues to be worrisome, the percentage gain remains less than that experienced by the province. In addition, Regina maintains an unemployment rate at least one full percentage point below both other jurisdictions. Jurisdiction
Indicator
Saskatchewan
Employment (x 1,000)
2015 ytd
2016 ytd
Percent Change
572.8
569.1
-0.7
Saskatchewan
Unemployment (x 1,000)
Saskatchewan
Unemployment rate (percent)
30.4
38.5
26.8
5.0
6.3
25.6
Saskatoon
Employment (x 1,000)
169.1
167.6
-0.9
Saskatoon Saskatoon
Unemployment (x 1,000)
10.0
12.0
20.4
Unemployment rate (rate)
5.6
6.7
20.4
Regina
Employment (x 1,000)
Regina
Unemployment (x 1,000)
137.2
138.9
1.2
6.5
7.8
20.8
Regina
Umeployment (rate)
4.5
5.3
19.1
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Conclusion and Implications for Business Employment in Regina continues to defy expectations (the Conference Board of Canada predicted 0.5% growth in employment for 2016) and is outperforming both Saskatoon and the province. While the increase in the number of unemployed could be problematic, employers have a larger pool of potential workers to draw from, with a corresponding lessening of upward wage pressures, as the lack of opportunities in Alberta fail to stimulate out-migration. The outlook for 2017 is less positive as budget pressures make continued growth in health care employment unlikely and public administration employment remains at risk. Definitions Employment: Employed persons are those who, during the reference week, did any work for pay or profit, or had a job and were absent from work. Unemployment: Unemployed persons are those who, during reference week, were available for work and were either on temporary layoff, had looked for work in the past four weeks or had a job to start within the next four weeks. Labour Force: Civilian non-institutional population 15 years of age and over who, during the survey reference week, were employed or unemployed. Unemployment Rate: Number of unemployed persons expressed as a percentage of the labour force. The unemployment rate for a particular group (for example, by age, sex, marital status etc.) is the number of unemployed in that group expressed as a percentage of the labour force for that group. Participation Rate: Total labour force expressed as a percentage of the population aged 15 years and over. The participation rate for a particular group (for example, women aged 25 years and over) is the labour force in that group expressed as a percentage of the population for that group.
Seasonal Adjustment: Fluctuations in economic time series are caused by seasonal, cyclical and irregular movements. A seasonally adjusted series is one from which seasonal movements have been eliminated. Seasonal movements are defined as those which are caused by regular annual events such as climate, holidays, vacation periods and cycles related to crops, production and retail sales associated with Christmas. While seasonal adjusted data allow month to month comparisons, it should be noted that these figures do not represent the actual number of individuals employed or unemployed. The more valid comparison is using the year-over-year change, comparing the raw data against the same month in a prior year. Source: Statistics Canada, Guide to the Labour Force Survey. Catalogue no. 71-543-G
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Impact Regina
Employment Rate (employment/population ratio): Number of employed persons expressed as a percentage of the population 15 years of age and over. The employment rate for a particular group (for example by age, sex, marital status, province, etc.) is the number employed in that group expressed as a percentage of the population for that group.
About EDR Economic Development Regina Inc. (EDR) is the economic development agency for the Greater Regina Area (GRA). EDR is a not-for-profit economic development corporation, governed by a volunteer board of directors for the GRA. The City of Regina is the sole member of the Corporation. 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. In collaboration with key stakeholders, we work to identify, develop and promote opportunities that advance economic prosperity and ensure the Regina region offers a vibrant and diversified economy for investors, is a positive destination experience for visitors and offers a high quality of life for residents. www.economicdevelopmentregina.com
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.
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Strategize, developing custom solutions tailored to clients’ most unique and complex needs.
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Execute strategic plans, portfolios and projects by facilitating internal project management, change management and communication capacity.
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