The worst of the home building drought in the province’s major cities may be over.
The monthly report on housing starts issued by Canada Mortgage and Housing shows a slight increase in activity in Regina and Saskatoon. Regina posted 240 new units begun in August. That’s about 70 more than Saskatoon’s total for the month.
But, overall numbers are still lagging where they were at this time last year. In other words, the slowdown continued through the winter and spring but, in August, finally began to show some positive movement as inventory levels began to fall in line or slightly below demand.
This is quite a contrast from the entire province where starts in all cities of more than 10,000 were up about 50-percent over last year.
In Regina, the big bump was in multi-family starts. There were about 200 units commenced, about double the number in Saskatoon which had roughly twice as many detached starts as Regina.
The economists at ScotiaBank have updated their outlook for the Saskatchewan economy and, like others in the private sector, they see a small contraction this year with a comparatively strong rebound in 2017.
ScotiaBank says we should expect the provincial economy to shrink by half a percentage point this year. This comes on the heels of a 1.4 percent decline last year.
But, they also suggest, the worst may be behind us as we head into the fourth quarter of 2016. They project expansion of 1.8 percent in 2017, a swing of nearly two-and-a-half percent from this year and recovery of pretty much everything that we lost in the last two years.
ScotiaBank also sees a further declines in employment levels this year but most of that will be recaptured next year.
These forecasts get a little more accurate as the year progresses because the economists have more data to plug into their models. As a result, we are seeing a closer correlation among the various projections coming from different organizations.
In Keynesian economic theory, governments play the role of economic catalyst in down times and are to pull back when things are going well.
The latest numbers on non-residential construction in this province suggest that at least part of that theory is working.
Investment was the primary driver behind the growth we saw for most of this century as money went into mines, oil field development and buildings housing businesses that support those sectors. It also created a lot of jobs which attracted people who built new houses and there were additional retail shops opened to serve a growing population.
Investment levels dropped off as mines were completed and oil prices fell. But we have now found a plateau with government occupying the space vacated by the private sector.
The latest numbers show investment in new buildings was steady through the first half of this year and up about 10-percent from a year earlier. There were declines in private investment in commercial and industrial activity but institutional or government spending went up, filling the gap.
Paul Martin You’ve heard him on the radio, seen him on TV and read him in newspapers and magazines. Paul is a popular keynote speaker on topics ranging from the economy to tapping community potential. His unique blend of communication and business knowledge has made him a highly sought-after consultant. As the Chair of Martin Charlton Communications, Paul is MCC’s ‘go to’ guy for all things business in Saskatchewan. He is the chair of four Saskatchewan branches of TEC (The Executive Committee) – a global organization dedicated to improving the performance and enhancing the lives of CEOs – which has over 50 CEOs and senior executives among its Saskatchewan members. The long and short: Paul knows the province’s corporate community and business economy like few others. He is a potent conduit for anyone looking to do business in Saskatchewan, Canada’s fastest growing economy. His strategic advice is unrivalled.