February 2019 Economic Report Card

This month we look at the economic indicators just released for December 2018 and January 2019.

The Regina economy continues to slow…

The Regina economy continues to slow in the final quarter 2018 and into the first month of 2019. Only industrial building permits posted increases with all other monthly indicators in decline: housing starts and total building permits dropped sharply with dropping employment. However, preliminary evidence suggests that the growth in the number of unemployed could be slowing.

• With a year-over-year drop of 300 positons, total average year-to-date employment in the Greater Regina Area was down only 0.2% in January 2019 over the same period in 2018. At the provincial level, year-to-date employment increased by 7,700 or 1.4%.
• Year-to-date employment in January 2019 was up over the same period in 2018 in Agriculture (400), Utilities (300), Construction (400), Transportation and warehousing (2,200), Educational services (2,600 ), Health care and social assistance (800), Accommodation and food services (500), and Other services (200).
• Year-to-date employment in January 2019 was down in Resource Extraction (-200), Manufacturing (-1300), Wholesale and Retail Trade (-500), Finance, insurance, real estate and leasing (-1700), Professional, scientific and technical services (-1600), Business, building and other support services (-500), Information, culture and recreation (-600), and Public administration (-1300).
• After a weak performance in 2017, construction employment bounced back in 2018 and the first month of 2019. Year-to-date January construction employment is up by 400 positions from the same period in 2018 on the strength of non-residential construction.
• The average year-to-date unemployment rate increased remained at 4.5% in January 2019, the same rate as in January 2018. Year-to-date, the number of unemployed is up only 100 in January 2019 from January 2018. Although only one month into the year, preliminary evidence suggests that the growth in the number of unemployed could be slowing.
• December 2018, total year-to-date housing starts are down by -784 units or -40.8% as the market struggles with over supply and stricter borrowing rules. Year-to-date declines were widespread and encountered across all classes of dwelling units: singles (-313 units or -47.1%), semi-detached (-108 units or -53.5%), row (-59 units or -23.4%), and apartment and other types (-304 units or -37.8% )
• December 2018 year-to-date building permits, a leading indicator of construction activity, are down -24.4% over the same period in 2017. The only sub sector that posted an increase was industrial (182.9%). During the same time period residential (-28.4%), Commercial (-28.6%), and institutional and governmental (-57.6%) posted declines.
• The average year-to-date Housing Price Index Benchmark Price is down from $277,200 in January 2018 to $266,600 in January 2019.
• With the pace of GDP growth at the national level suggesting that the economy is operating at close to full capacity, the Bank of Canada raised the overnight rate to 1.75% on October 24, up from 1.5%. This represents the highest rate since December 2008 and more rate increases are likely to follow in 2019 with additional GDP growth stemming from the new United States-Mexico-Canada Agreement.
• 2017 Regina Census Metropolitan Area population was up 2.4% over 2016 to 253,220 on the strength of international and intra-provincial migration. This can be expected to continue through 2018 with continued, although slowing, employment growth spurring further in-migration.
• The Conference Board of Canada forecasts Regina’s economy to post a 2.1% real GDP gain in 2019, following a 2.2% increase in 2018.