By Bruce Johnstone, Leader-Post, February 26, 2014 - REGINA - Construction of a new $278-million stadium will help boost Regina’s economic growth to 3.5 per cent in 2014, second-highest among major Canadian cities, says the Conference Board of Canada’s latest forecast.
“Calgary, Regina, Edmonton, and Saskatoon will lead Canadian metropolitan areas in economic growth in 2014,” said the Conference Board of Canada’s metropolitan outlook released Wednesday.
Regina’s estimated five per cent growth in 2013 was the third-fastest among the 28 Canadian cities surveyed by the Conference Board, while projected real gross domestic product (GDP) growth of 3.5 per cent this year will rank second only to Calgary’s projected 3.7 per cent growth.
Employment has been rising for eight straight years, including a record 6.2 per cent jump in 2013. Despite record-high net in-migration and population growth, Regina’s labour force participation rate last year was the highest since 1988, and the unemployment rate among the lowest in the country.
Still, employment is forecast to keep growing, albeit at more moderate pace, including a one per cent gain in 2014. In fact, the labour force is expected to grow faster than employment in 2014, nudging the unemployment rate up slightly from its current rock-bottom level, although it is expected to stay low.
Regina’s manufacturing output has risen faster than the national average during eight of the past 10 years. Output will be bolstered by the official opening last fall of the $2.7-billion expansion of the Co-op Refinery Complex, which boosted its production capacity by 30 per cent to 130,000 barrels per day.
Regina’s construction industry rebounded from a one per cent drop in 2012 — the first in five years — to expand 2.4 per cent in 2013. Work on a new stadium to house the Saskatchewan Roughriders will boost construction output by 11 per cent in 2014 and a further 7.5 per cent in 2015.
Housing starts rose above 3,000 units in both 2012 and 2013 — more than triple the 30-year average — with the biggest gains among multi-family units. But the recent pace of multi-family starts was unsustainable, so multiple starts are expected to fall in 2014, trimming total starts to 2,200 units.
Although Regina’s resale housing market is considered a buyers’ market, sales volumes are still healthy and price growth is decent. This has pushed growth in finance, insurance, and real estate above four per cent in each of the past three years; continued housing demand should keep sector growth brisk at 3.8 per cent in 2014.
By contrast, the public administration sector shrank 0.4 per cent in 2013, the first contraction since 2000. Indeed, this industry has seen the slowest growth among all services subsectors for three straight years, as the Saskatchewan Party government is attempting to balance its budget as revenues ease. Only a modest 0.7 per cent expansion is expected in 2014.
Meanwhile, brisk employment and income growth, combined with a surging population, have boosted Regina’s retail sales to average annual hikes of 3.7 per cent during the past five years, well above Canada’s 2.5 per cent average. In fact, wholesale and retail trade have increased more than six per cent annually over the past four years, including a 6.6 per cent jump in 2013. However, more moderate increases in wholesale and retail trade of two per cent annually are expected over the next few years.
“Along with Calgary, prairie cities will have the fastest growing economies in 2014, although that growth is expected to moderate,” said Alan Arcand, principal economist with the board’s Centre for Municipal Studies.
After the devastating flood in the summer of 2013 temporarily shut down the city and resulted in slower growth for the year as a whole, Calgary’s economy is expected to rebound in 2014. Economic growth in Edmonton is set to moderate from 4.6 per cent in 2013 to a solid 3.4 per cent this year.
Following impressive growth of 6.5 per cent in 2013, Saskatoon’s GDP will expand by 3.2 per cent this year, as strength in the services sector is offset by slower activity on the goods-producing side of the economy. Real GDP in Winnipeg is forecast to rise two per cent this year, up from 1.6 per cent in 2013, thanks to stronger growth in manufacturing, wholesale and retail trade, and public administration.