Halifax Economic Report

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1 Halifax Economic Report OCTOBER 216 J.K. MacAdam Economist and Project Development Specialist

2 Highlights 216 continues to be a strong year for Halifax, driven by growth in shipbuilding, construction projects, and the service sector. Shell Canada has been approved to resume drilling off Nova Scotia in the first of their two wells. Housing and apartment starts are down 27.1% compared to the same time period last year. This large decrease is a function of the exceptionally high number of apartment starts in May and June of 215. Current Economic Indicators for Halifax Period YTD 215 YTD 216 % Change Labour Markets Real GDP at basic prices (27 $ millions) Annual 18,3 18,88(f) 2.8% Population (Thousands) Annual (f) 1.% Employment (Thousands) Jan-Sept % Unemployment rate (%) Jan-Sept 6.4% 6.3% -.1 Labour force (Thousands) Jan-Sept % Participation rate (%) Jan-Sept 68.8% 68.3% -.5 Consumer Markets Average weekly earnings (Current $) Jan-Aug % Consumer price index (22 = 1) Jan-Sept Retail sales (Current $ millions) Jan-July 2,759 2,93 6.2% Aircraft Passengers (Thousands) Jan-Sept 2,871 3,25 5.4% Cruise ship passengers (Thousands) Jan-Sept % Containerized Cargo (Thousands TEUs) Jan-Sept % Housing and Construction Markets Housing starts Jan-Aug 2,295 1, % Housing resales Jan-Aug 2,28 2, % Value of building permits (Current $ millions) Jan-Aug % Non-residential construction (27 $ millions) Jan-Jun % (f) - Forecasted Data Sources: Statistics Canada, Canada Mortgage and Housing Corporation, Conference Board of Canada, Halifax International Airport Authority, Port of Halifax Halifax is forecasted to be the second best economic performer in Canada (behind Vancouver) in 216 with 2.8% GDP growth, according to the Conference Board of Canada. 1 Growth is being driven by the manufacturing and construction industries. The Irving Shipyard has increased its production, manufacturers are benefitting from the low Canadian dollar, and the construction industry is growing due projects such as The Big Lift, the Nova Centre, and the Roy Condominiums, for example. 1 Conference Board of Canada s Spring Forecast. The Autumn Forecast will be released on November 4th. 2 P a g e

3 Labour Force The labour market continued to be strong through the first three quarters of 216. Employment was up by 1.6% with full-time employment increasing by 2.9% and part-time employment decreasing by 1.3% compared to September 215. Employment gains were concentrated in the following areas: 1,9 in health care and social assistance (5.9%), 1,9 in educational services (1.8%), and 1, in construction (7.%). The Big Lift project and the construction of numerous condos in the city has created most of the new construction jobs. Information, culture and recreation had a decrease of 2,5 jobs and wholesale and retail trade employment decreased by 2,4 jobs. Halifax Full-Time Employment Gains ,183 1, ,644-1, Full-time employment 215 Part-time employment 216 Source: Cansim Series Table Average weekly earnings grew by 1.8% year-to-date (YTD) to August which outpaced the growth in consumer prices of 1.2%. 2 Consumer price increases have been moderated by the substantial decrease in fuel costs from 215 to August of this year and by shelter prices remaining steady. The decrease in oil prices was the main driver to the reduction in overall prices, with water and electricity costs remaining constant in the HRM. Non-Residential Investment Construction investment has decreased significantly in the first three quarters compared to 215. This is because mega projects such as the Nova Centre, The Big Lift, King s Wharf, and Dartmouth Crossing are no longer in the investment phase of development. When developers projects are complete and occupied, they will begin to invest again in new projects. This type of cycle can be seen in the graph below, with a low point reached in Q2 214 followed by investment in new projects such as the Nova Centre. 2 Please note that YTD August CPI statistics were used for this section due to a one month lag in earnings data. 3 P a g e

4 Nova Scotia Non-Residential Investment Spending ($1,s) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q Total non-residential Industrial Commercial Institutional and governmental Source: Cansim Series Table Record Summer for Tourism Industry Nova Scotia is on pace to have had its busiest tourism season ever. Total tourism revenues for August 216 were estimated to be $46 million with YTD revenues of $1.7 billion. It is forecasted that total tourism revenues for 216 will be $2.6 billion, which is an increase of $1 million compared to 215. The forecasted growth of 4% is a step in the right direction, but revenue growth will need to increase further if the lofty goal of $4 billion in total revenue is going to be met in 224. There were almost 4, overnight visitors in the province and there was a 21% increase in air visitation to Halifax in August. The majority of new visitors in August were from Ontario (14%), Western Canada (14%), and the United States (11%). The occupancy rates for hotels in Nova Scotia improved by five percentage points compared to last August and there were 372, rooms sold, which was 4% more than last year. Halifax was the top performer in Nova Scotia in both categories, selling 157, rooms and improving the occupancy rate by 5 percentage points to 81% in August. Overall, total visitation to Nova Scotia has increased 7.7% YTD. The spike in visitation is due to a 12% increase in visitors from the United States and 8% in visitation from Ontario and Western Canada residents. This has led to an increase in the occupancy rate of 2% and increased the number of rooms sold by 3% YTD. Total Annual Revenue ($Billions) $3. $2.5 $2. $1.5 $1. $.5 $ (f) Source: Tourism NS Note: Years 214 and 215 are estimates and 216 is forecasted. 4 P a g e

5 Apartment Starts Decreasing as Projects Near Completion; Single- Detached Starts Increasing According to CMHC s Housing Market Outlook Spring 216, residential housing starts are forecasted to be between 2,165 and 2,235 units in 216. This is down from 2,478 residential units the year before. Single-detached homes are forecasted to be between 485 and 515, up from 215 s 425 single-detached starts, and multi-unit starts are forecasted to range between 1,625 and 1,775 units in 216, down significantly from 2,53 units in 215. Housing re-sales increased 17% year-over-year in the first quarter of 216 with sales forecasted to be 5,65 and 5,135 in 216. Halifax s average resale prices have decreased by.2% year-over-year in the first quarter as per CMHC s Third Quarter Housing Market Assessment. This could be a concern for homeowners hoping to build equity in their houses, but it is helpful for attracting businesses and their employees to Halifax, especially in comparison to rapidly escalating prices in Toronto and Vancouver. Halifax Housing Starts ,627 2,41 1,941 2, , YTD 216 Single-detached Apartments and Semi-detached Source: Cansim Series and CMHC Housing Now The continued strength in apartment starts compared to single-detached homes is consistent with young professionals and retirees preferences to purchase smaller homes in urban areas. This trend is accelerated in Halifax compared to other major cities partially due to Halifax s aging population. The Halifax Partnership The Halifax Partnership is Halifax s economic development organization. We help keep, grow and get business, talent and investment in Halifax. We do this through leadership on economic issues, our core programs, our partnerships across all sectors, and by marketing Halifax to the world. If you have any questions or concerns about this document, its methodology, or how its indices are measured, please contact the Partnership at info@halifaxpartnership.com for further details. 5 P a g e

HALIFAX PARTNERSHIP QUARTERLY ECONOMIC REPORT JULY 2017

HALIFAX PARTNERSHIP QUARTERLY ECONOMIC REPORT Housing starts in Halifax increased by 37.4% in the first half of 2017. Labour force participation continues to decrease, down 1% compared to 2016. The Port