January 2019 Economic Report Card

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

The Regina Economy continues to slow…

The Regina economy continues to slow in the final quarter 2018. Only industrial building permits have posted increases with all other monthly indicators in decline. In construction, housing starts and total building permits dropped sharply. Employment is also dropping, with the number of unemployed and unemployment rates increasing.

• With a year over year drop of 1,700 positions, total average year-to-date employment in the Greater Regina Region was down only 0.05% or 67 positions in January to December 2018 over the same period in 2017. At the provincial level, year-to-date employment advanced by 2,367 or 0.4%.
• Year-to-date employment in December 2018 was up over the same period in 2017 in Utilities (125), Transportation and warehousing (267), Finance, insurance, real estate and leasing (392), Business, building and other support services (1,383), Educational services (1,783), and Other services (217).
• Year-to-date employment in December 2018 was down Agriculture (-317), Resource Extraction (-750), Manufacturing (-983), Wholesale and Retail Trade (-867), Professional, Scientific and Technical Services (-1,292), Health Care and Social Assistance (-900), Information, Culture and Recreation (-225), Accommodation and Food Services (-133), and Public Administration (-200).
• After a weak performance in 2017, construction employment bounced back in 2018. Year-to-date December construction employment is up by 1,400 positions from the same period in 2017 on the strength of non-residential construction.
• The average year-to-date unemployment rate increased to 5.9% in December 2018, up from 5.1% in December 2017. With negative job growth, the numbers of unemployed advanced sharply. Year-to-date, the number of unemployed is up from 7,583 in December 2017 to 8,883 in December 2018. Increases in the number of unemployed and the labour force (those working and actively seeking work) indicate that Regina is not experiencing significant out-migration of unemployed or the “discouraged worker” effect. Discouraged workers are those who want and are available to work, but have dropped out of the labour force because they believe there aren’t any jobs for them.
• November 2018, total year-to-date housing starts are down by -761 units or -40.9% 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 (-308 units or -48.4%), semi-detached (-114 units or -57.6%), row (-44 units or -18.9%), and apartment and other types (-295 units or -37.2%).
• November 2018 year-to-date building permits, a leading indicator of construction activity, are down -27.2 % over the same period in 2017. The only sub sector that posted an increase was industrial (171.9%). During the same time period residential (-31.7%), Commercial (-33.2%), and institutional and governmental (-55.4%) posted declines.
• The average year-to-date Housing Price Index Benchmark Price is down from $290,175 in December 2017 to $275,750 in December 2018.
• 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 per cent on October 24, up from 1.5 per cent. 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 per cent real GDP gain in 2019, following a 2.2 percent increase in 2018.