Key Economic Indicators *

March 2017 Volume XXXIV Number 3 www.sasktrends.ca ISSN 0830-0143 CONSUMER SPENDING TRENDS A number of indicators suggest that the slump in consumer spending ended late in 2016 but the layoffs and tax increases in the provincial budget may put that tentative recovery at risk. THE MANUFACTURING SECTOR After a rough patch in 2016, the manufacturing and processing sector is growing in early 2017 but the turnaround is limited to non-durable goods. FUEL TAXES AND ROAD CONSTRUCTION The amount we pay in fuel taxes is not enough to finance ongoing construction and maintenance of the provincial highway system. PRODUCTIVITY Productivity in the provincial economy continues to decline and to do so more quickly than in other provinces. Something needs to change. Key Economic Indicators * Canada Employment (Mar) 0.2% 0.4% 0.8% 1.6% Retail Sales (Feb) 4.1% 2.7% (0.4%) 3.1% Urban Housing Starts (Mar) 62% 49% 223% 25% Consumer Prices (Mar) 1.3% 0.6% 1.6% 1.6% Manufacturing Shipments (Feb) 13.4% 20.8% (0.4%) 3.4% Farm Cash Receipts (Q3) (17.0%) (14.6%) (4.7%) (8.8%) Average Hourly Wage Rates (Mar) (0.3%) 0.5% 3.7% 1.1% Population (Q4) 1.5% 1.5% 1.7% 1.3% * percentage change from the same period a year ago; negative numbers in parenthesis

Page 2 March 2017 CONSUMER SPENDING TRENDS L ast month, Sask Trends Monitor noted that business confidence was recovering. Capital investment had stopped declining and was expected to increase, albeit modestly, in 2017. Consumers are another major player in the economy. This article looks for signs of a similar recovery in consumer confidence and consumer spending. Consumers are important. Saskatchewan residents spent $36 billion in 2015, accounting for about one-half of the expenditure-based GDP measure of the provincial economy. There are reasonably good statistics about spending on goods such as vehicles, groceries, and clothes. Spending on services such as travel, movies, and restaurant meals is not as complete. Retail Sales The best overall measure of consumer spending on goods (rather than services) is the value of retail sales in the province. These figures do not include purchases from outside the province, either cross-border shopping or online purchases. Some purchases by businesses are embedded in the retail sales figures but consumers are the main drivers of provincial retail trade. Figure 1 shows the annual change in retail sales in the province over the past eight years. Spending was growing rapidly from 2010 to 2014, averaging 3.7% per year after adjusting for inflation. With the drop in commodity prices in the last half of 2014, spending fell sharply in 2015 and then recovered slightly in 2016, particularly later in the year. In early 2017, sales are up 2.8% after adjusting for inflation so a turnaround is apparently under way. Consumer Durables Economists typically use the purchase of big-ticket or expensive items as a measure of consumer confidence. This is because most consumers will need a loan to buy a vehicle or a house and most will not be willing to go into debt if they are not confident about their future economic well-being. Figure 2 shows that spending on motor vehicles started to decline in 2014 and the fell again in 2015 and 2016. Once again, there are signs that the bottom has been reached. Unit sales in the fourth quarter of 2016 were down by only 1.9% and in the first two months of 2017, they have increased by 9.5%. 8% 6% 4% 2% 0% -2% -4% -6% 15% 10% 5% 0% -5% -10% -15% 50% 40% 30% 20% 10% 0% -10% -20% -30% -40% Figure 1: Annual Change in Saskatchewan Retail Sales, Adjusted for Inflation -1.5% 2.1% 4.4% 5.8% 3.9% 2.5% -4.4% 1.1% 2009 2010 2011 2012 2013 2014 2015 2016 Figure 2: Annual Change in Unit Sales of New Motor Vehicles, Saskatchewan -9.3% 6.0% 7.3% 10.6% 4.6% -1.2% -5.4% -5.7% 2009 2010 2011 2012 2013 2014 2015 2016 Figure 3: Annual Change in Value of Residential Building Permits, Saskatchewan -27.1% 42.5% 25.0% 27.4% -1.4% -12.4% -25.4% -12.7% 2009 2010 2011 2012 2013 2014 2015 2016

Page 3 March 2017 The value of residential building permits is another a good indicator of how much consumers are willing to spend on buying or renovating their homes another bigticket item. The value of permits fell slightly in 2013 and then more sharply in 2014 and 2015. The decline was less pronounced in 2016 with an increase in the fourth quarter of 2016 and a 9.8% increase in early 2017. Spending on Services Turning to service, Statistics Canada publishes information about gross sales in bars and restaurants a key indicator for spending on services rather than goods. Figure 4 shows that, adjusted for inflation, sales declined in 2016. This is the first decline in more than ten years. In this case, there is a modest sign of a turnaround but sales in the fourth quarter of 2016 were still below the levels in 2015. Another measure of consumer spending on services is the number of winter trips to sunny climes. These figures measure the number of Canadian residents returning to Saskatchewan from trips abroad. Business trips will be included in the figures. Figure 5 shows the decline in this measure started in the winter of 2014-15 and accelerated in 2015-16. Preliminary figures suggest that the drop this winter was smaller. 8% 7% 6% 5% 4% 3% 2% 1% 0% -1% -2% 15% 10% 5% 0% -5% Figure 4: Annual Increase in Sales in Bars/Restaurants, Saskatchewan, Adjusted for Inflation 0.5% 2.6% 2.6% 6.5% 3.0% 2.4% 0.4% -1.1% 2009 2010 2011 2012 2013 2014 2015 2016 FIgure 5: Annual Change in Winter Trips Abroad, Saskatchewan 7.5% 10.8% -0.3% 6.1% Summary -10% -8.4% -7.3% In our experience, it is quite unusual for economic theory to line up with actual behaviour but it seems to be doing so for consumer spending. Commodity prices began to fall in the last half of 2014. That year, the sales of consumer durables such as vehicles and houses fell in response. The following year, 2015, sales of those bigticket items fell even more quickly and the slowdown extended to general retail sales In 2016, the restraint extended to the purchase of services such as restaurant meals. Statisticians use percentage changes to measure inflexion points the point in a time series when there is a change in direction. Most, but not all, of the measures of consumer spending are showing that change, either because the decline is less pronounced (e.g. building permits) or has reversed (e.g. retail sales). That suggests the bottom of the economic downturn has been reached. The bottom occurred in the fourth quarter of 2016 or the first quarter of 2017, depending on the measure. -15% -20% -16.0% 2010-11 2012-13 2014-15 2016-17 est November to March The risk now is from the March provincial budget. The layoffs and increases in taxes will have dampened consumer confidence, particularly in Regina where the public sector is larger, but elsewhere in the province as well. This will delay the recovery in consumer spending although it is too soon to know by how much. In the next few months, we will be paying close attention to the statistics describing consumer spending measures to see what the impact will be. With government spending restraint and exports at risk, the fate of the Saskatchewan economy is in the hands of the consumers. Source: Statistics Canada

Page 4 March 2017 THE MANUFACTURING SECTOR A fter a slump in 2015, a modest recovery is under way in Saskatchewan s small manufacturing and processing sector. Measured by the contribution to the overall economy or employment, the sector is smaller in Saskatchewan than in any other province except Newfoundland. The sector accounted for 4.5% of employment in 2016 and 6.4% of GDP in 2015. Statistics Canada classifies the manufacturing sector into two broad groups. Durable goods manufacturing is the part of the sector most people identify as manufacturing. The best examples in Saskatchewan are steel products from Evraz and the machinery from the province s farm machinery manufacturers. Non-durable goods manufacturers are more diverse and include chemical processors such as Yara, food processors such as AGT Food and Ingredients, and Federated Coop s refinery. Measured by sales, nondurable goods account for 69% of sales. Measured by employment, the opposite ratio holds with non-durable goods accounting for 39% of total jobs. Manufacturing Sales The value of sales grew from 2010 to 2014 with increases averaging 10% per year. Much of this would have been the result of an increase in prices (e.g. gasoline and fertilizer) rather than an increase in production. Figure 1 shows that sales dropped by 11% in 2015 where they remained in 2016. In the first two months of 2017, sales are up 16% compared with the same period in 2016 a sign of the aforementioned recovery. The increase from 2010 to 2014 was evenly split between durable and non-durable goods. The decline in 2015 was also evident among both durable goods (-14%) and nondurable goods (-10%). The recovery in 2016 was, however, exclusively in non-durable goods (+5%). Sales of durable goods continued to decline, dropping by 6% in 2016. Almost one-half of Saskatchewan s manufactured goods are shipped to other countries. Figure 2 shows the sharp increase in the value of exports between 2010 and 2012 and the subsequent levelling off. As with domestic sales, the growth from 2010 to 2012 was among both durable and non-durable goods exports. The durable goods sector suffered in 2016 with a 36% decline whereas the record $5.1 billion in non-durable exports was a 16% increase. $18 $16 $14 $12 $10 $8 $6 $4 $2 $0 $7 $6 $5 $4 $3 $2 $1 $0 32 30 28 26 24 22 20 18 Figure 1: Sales in the Manufacturing and Processing Sector, Saskatchewan $ billions 26% -3% 17% 12% -11% -15% 2008 2009 2010 2011 2012 2013 2014 2015 2016 20% 36% 8% annual change 16% -2% -5% annual change -14% 2008 2009 2010 2011 2012 2013 2014 2015 2016 3% Figure 2: Value of International Exports, Manufacturing and Processing Sector, Saskatchewan $ billions 1.3% -4.1% -0.3% -8.3% 0.4% 6.1% 0% -1.7% 1% 4% 4% Figure 3: Employment in Manufacturing and Processing (main job), Saskatchewan thousands annual change -9.3% -1.9% 2008 2009 2010 2011 2012 2013 2014 2015 2016

Page 5 March 2017 The bulk of manufacturing exports 72% in 2016 go to the United States. That means the growth in exports is at risk from the tariff and non-tariff barriers that the Trump administration is planning. Manufacturing Employment The growth in sales was not accompanied by employment increases. Figure 3 shows that, with minor annual ups and downs, manufacturing employment has been on a downward trend for the past ten years. Employment in 2016 was 25,700 compared with 31,500 in 2008. This will be mainly because the growth in sales is simply an increase in prices which does not require additional employees. $30 $25 $20 $15 $10 Figure 4: Average Hourly Wage Rates in Manufacturing and Processing (paid workers only), Saskatchewan $/hour 12.9% 7.7% -0.3% 2.3% 8.2% 0.6% 1.9% 1.0% annual change 6.3% Employment in 2016 shifted to non-durable goods where employment increased by 9% whereas it fell by 8% among durable goods manufacturers. Wage rates in the sector are shown in Figure 4 and annual payrolls, which are a function of wages, employment, and hours of work are shown in Figure 5. The average annual increase of 3.2% from 2010 to 2014 means that wage rates are keeping pace with those in other sectors where the average annual increase was an identical 3.2%. The 6.3% increase in 2016, on the other hand, was well above the 3.3% increase in the provincial average. Even though the wage rates are increasing, the aggregate payroll was not. This is because there were fewer workers. Those who were employed were working, on average, 39.3 hours per week, the same as in 2015. Overtime was, however, less common. Capital Investment The final figure shows capital investment by the sector with the level of new capital investment over $1 billion in 2010 and 2011. It has subsequently fallen back to $558 million in 2016. According to the Capital Expenditure Survey, investment in 2017 will fall to near $400 million in 2017, the lowest since 2007. $5 $1,800 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 $1,200 $1,000 $800 2008 2009 2010 2011 2012 2013 2014 2015 2016 4% Figure 5: Average Annual Payroll in Manufacturing and Processing, Saskatchewan $ millions -5% -3% 14% 8% annual change 11% -2% -5% -4% 2008 2009 2010 2011 2012 2013 2014 2015 2016 Figure 6: Capital Investment in New Facilities, Machinery, and Equipment $ millions Summary and Outlook $600 There are three main findings from this short overview of Saskatchewan s manufacturing sector. $400 32% 58% 61% 46% Firstly, the value of shipments from the sector had been on an upward trend until the sharp drop in 2015. Both the increase and the subsequent decline were mainly because $200 $0 annual change -1% -15% -17% -31% -29% 2008 2009 2010 2011 2012 2013 2014 2015 2016

Page 6 March 2017 of changes in the value of the goods produced rather than the volume of output. Secondly, the recent recovery from the drop in 2015 is mainly because the non-durable part of the industry is doing particularly well. Thirdly, the tentative recovery in the sector is at risk because of the low level of capital investment and the trade protectionism of the Trump administration in the USA. Source: Statistics Canada FUEL TAXES AND ROAD CONSTRUCTION M otor vehicles are necessary in Saskatchewan but they do place an enormous burden on citizens. The roads, garages, and parking lots take up a huge amount of the urban space. Tailpipe emissions are a major cause of pollution and global warming. Accidents injure or maim thousands of people annually. On the other side of the equation, oil refineries, service stations, car dealerships, and auto body repair shops provide thousands of jobs. The taxes paid on gasoline do, as this article will show, contribute to some of these costs. In particular, they pay for about 70% of the cost of building and maintaining the provincial highway system. As a rule, governments do not like to assign specific taxes to specific expenditures because it ties their hands when determining spending priorities. The gasoline tax is not an exception because the provincial government does not explicitly allocate the tax to the aforementioned costs associated with vehicles. government. About 90% of the Ministry s budget is thought to be spent on roads. In 2015-16, for example, $710 million of the $799 million for the Ministry was used to build and maintain provincial highways and bridges. These two calculations are a rough-and-ready measure of what road-users pay in fuel tax and what the provincial government spends on highways. The figures show that spending consistently exceeds revenues. Over the course of the eight years ending in 2015-16, spending on highways has exceeded revenues from the fuel tax by $1.5 billion. The trend suggests the gap is widening. If we accept the notion that the fuel tax should be used exclusively for road construction and maintenance, then it is clear that the fuel tax would need to be increased so that people who use the roads the most are paying for a larger share of their cost. A rough estimate suggests that a another 5 /litre would be enough to make up the shortfall. Source: Ministry of Finance Public Accounts The Ministry of Finance does, however, provide a comparison of the revenues from the fuel tax and expenditures on road construction and maintenance in the annual public accounts. To arrive at the fuel tax revenues, the Ministry removes taxes collected for locomotive and aviation fuel. They also net out the rebates provided to farmers and the commissions to the service stations. On average, the people who probably use the provincial highway system pay about 85% of fuel tax. In 2015-16, for example, $430 million of the $500 million in fuel tax was paid by the road-users. $800 $700 $600 $500 $400 $300 $200 Fuel Tax Revenues vs. Provincial Transportation Expenditures, Saskatchewan $ millions expenditures revenues On the other side of the equation, the total spending by the Ministry of Highways and Infrastructure is reduced by spending on airports, salaries paid to executive management and money received by the federal $100 $0 2008 09 2009 10 2010 11 2011 12 2012 13 2013 14 2014 15 2015 16

Page 7 March 2017 PRODUCTIVITY I n the September issue of Sask Trends Monitor, we reported on the productivity of the Saskatchewan economy and how it had declined steadily in the past ten years with the worst performance among the provinces. Statistics Canada has released preliminary estimates for 2015 and they show a further decline. These figures look at total factor productivity (TFP), sometimes called multifactor productivity or as simply productivity. TFP combines labour productivity and capital productivity using a mathematical model and is published using an index with 2007 = 100. Only the business sector is included in TFP. Health, education, and the government sectors are excluded but the crowns are included. 120 110 100 90 80 70 Figure 1: Three Measures of Productivity for Saskatchewan's Business Sector 2007 = 100 labour productivity capital productivity total factor productivity Figure 1 shows the continued decline in productivity with a modest decline in labour productivity after two years of increases and a substantial drop in capital productivity. Over the period from 2005 to 2015, the average annual decline was 3.1% per year. This is the second worst performance among the provinces. Newfoundland recorded a 3.2% average annual decline. Alberta recorded a 1.3% decline whereas Manitoba recorded a 0.4% increase. Figure 2 below shows that there were productivity declines in eight of the fifteen industry groups. The main culprit is the large resource sector where the productivity 60 2005 2007 2009 2011 2013 2015 in 2015 was a third of the level that it was in 2005. The best performing industry group was wholesale trade. There are measurement issues with total factor productivity but they are not enough to account for this dismal performance. There is clearly something amiss in the way that the Saskatchewan economy is performing. The status quo is not sustainable. Source: Statistics Canada CANSIM Matrix 383-0026 Figure 2: Average Annual Change in Capital Productivity by Industry Group, Business Sector, 2005 to 2015 Mining and oil and gas extraction Construction Utilities Transportation and warehousing Arts, entertainment and recreation Information and cultural industries Accommodation and food services Professional, scientific and technical services Manufacturing Finance, insurance, real estate Business support Agriculture, forestry, fishing and hunting Retail trade Personal and household services Wholesale trade -9.1% -4.1% -3.2% -1.7% -1.7% -0.9% -0.6% -0.5% 0.1% 0.5% 0.7% 1.0% 1.2% 1.4% 1.8% -11% -10% -9% -8% -7% -6% -5% -4% -3% -2% -1% 0% 1% 2% 3% annual change from 2005 to 2015

Page 8 March 2017 HIGHLIGHTS OF CURRENT SASKATCHEWAN STATISTICS Job Vacancies We have accumulated six years of data from Statistics Canada s survey of job vacancies so some trends are evident. Compared with the peak of 13,050 vacancies in 2012, the number of vacancies has declined steadily to reach an average of 6,025 in 2016. Vacancy statistics measure the mismatch between labour supply and labour demand and are difficult to interpret. The high levels during 2011 to 2014 will have been the measure of a shortage of workers during the economic boom. The low numbers in 2015 and 2016, on the other hand, will be indicative of a drop in demand. In any case, 6,000 vacancies for the 38,000 unemployed means that jobs are hard to find. 16 14 12 10 8 6 4 2 0 Average Number of Monthly Job Vacancies (excluding governments), Saskatchewan thousands 2011 2012 2013 2014 2015 2016 Employment Retail sales Consumer price inflation Wholesale trade Employment insurance International trade Crop prices Housing starts Capital construction costs After the big jump in employment in February, the March figures are still up on a year-over-year basis but with a much more realistic 0.4% increase. Employment in the first quarter of 2017 is up 0.3% from the same period in 2016 with substantial increases among Aboriginal people, those living in the East Central part of the province, and in manufacturing, wholesale/retail trade, and professional services. Sales in the first two months of 2017 are up by 3.0% but the increase is mainly because of higher gasoline prices. Excluding the 23.2% increase in gross receipts at gasoline service stations, sales are effectively unchanged from a year ago. The inflation rate in March fell to 0.6% which is much lower than expected. A 3.5% drop in grocery prices was the main reason but prices also fell in household operations. The inflation rate is still expected to average 2.5% for 2017. After a decline of more than 10% in 2015, the value of sales from Saskatchewan wholesalers is up 10.5% in the first two months of 2017. Farmers are spending 14% more on agricultural supplies and 20% more on machinery and equipment. Employment in wholesale trade is up 11% in the first quarter of 2017. The number of people receiving regular employment insurance benefits was 20,600 in February compared with 18,840 in February 2016. The rate of growth is slowing as the labour market recovers and recipients exhaust their benefits. After a sharp decline in the value of exports last year, there is an 8.2% increase in the first two months of 2017. The value of imports is also increasing. As we get ready to seed, the price of canola is up 8% in the first quarter of 2017. The spot prices for peas and lentils, on the other hand, are down 7% and 18% respectively. Wheat prices are flat. After three years of declines, the number of starts in urban areas is up 11% in the first quarter of 2017. The increase is exclusive to Regina where starts were up 69% compared with a decline in 14% in Saskatoon and 53% in other centres. Throughout most of the last ten years, construction labour costs have been growing more quickly than the cost of materials. From 2010 to 2016, wages increase by an average of 4.1% per year whereas material and operating costs increased by an average of 1.4%. The opposite is true so far this year with a 2.8% increase in material costs and a 4.3% decline in labour costs.

Page 9 March 2017 Annual/monthly totals or averages Percentage changes: Employment and the Labour Force 2014 2015 2016 2017 Feb March year to Average Average Average March 2017 2016 date Labour force Employed 571 574 568 561-0.4% 0.4% 0.3% status (15 and Unemployed 23 30 38 41 4.1% -2.6% 3.6% older) in Not in the labour force 258 257 262 273 0.7% 2.6% 1.6% thousands Total 852 861 869 874 0.1% 0.9% 0.9% Participation rate (%) 69.7% 70.1% 69.8% 68.8% -0.3%pp -0.7%pp -0.3%pp Employment rate (%) 67.0% 66.6% 65.4% 64.2% -0.5%pp -0.5%pp -0.5%pp Unemployment rate (%) 3.8% 5.0% 6.3% 6.7% 0.2%pp -0.2%pp 0.2%pp Average hourly wage rate for paid workers $25.32 $25.95 $26.82 $27.07 0.4% 0.5% 0.5% Unadjusted (actual) total 571 574 568 561-0.4% 0.4% 0.3% Seasonally adjusted total 571 574 568 570-0.9% 0.4% 0.4% Employment Men 312 311 308 299-0.8% 0.0% 0.0% (000) Women 259 263 260 262 0.0% 0.8% 0.7% 15 to 24 years of age 86 84 80 72-2.2% -3.8% -3.1% 25 to 39 years of age 188 193 196 196-0.6% 2.1% 1.4% 40 to 54 years of age 175 175 169 167 0.2% -1.8% -1.7% 55 and older 122 122 124 127 0.0% 2.9% 3.7% Full time 473 473 467 456 0.0% 1.3% 0.2% Part time 98 101 102 105-2.3% -3.8% 1.0% Multiple job holders 41 43 43 43-6.6% 4.4% 7.7% Agriculture 44 41 41 36-2.5% -10.9% -8.6% Forestry, mining, oil/gas, utilities 34 33 32 31 1.0% -1.9% -4.5% Employment Construction 57 56 51 45-3.8% -9.2% -6.7% by industry Manufacturing 29 26 26 28 0.0% 15.1% 10.2% group Transportation, warehousing 29 30 28 28-1.1% 2.9% 4.2% (000) Wholesale and retail trade 84 84 88 92-0.3% 8.1% 8.1% Finance, insurance, real estate 30 31 29 27 2.3% -9.7% -11.1% Professional, technical services 26 25 28 33 4.8% 22.6% 19.8% Management and support services 13 14 13 12 2.5% 0.8% 0.0% Health and social services 73 78 79 77-1.0% -2.8% -2.8% Education services 43 44 41 44-2.7% -0.9% 3.9% Accommodation and food services 36 38 38 36 0.0% -3.5% -5.0% Information, culture, recreation 16 19 20 20-1.5% 6.9% 2.5% Personal and household services 25 26 25 24 3.0% -5.1% -6.8% Public administration 30 29 29 29 0.3% 4.7% 1.0% Employment Paid, private sector 324 330 325 320-0.1% 3.0% 2.1% by category Paid, public sector 136 140 139 138-1.4% -1.8% 0.9% (000) Self employed and unpaid family 111 104 105 103-0.1% -4.5% -5.5% Aboriginal (15 to 64 years) off Reserve 43 43 44 46-2.3% 7.7% 9.5% Non-Aboriginal (15 to 64 years) 499 503 496 484-0.1% -0.8% -1.8% Employment Born in Canada (15 years and older) 496 499 484 481-0.5% 0.8% -0.2% (3 month Immigrated in the last 5 years (15+) 26 26 29 27 3.4% -0.7% -2.3% moving Immigrated 5+ years ago (15+) 34 36 45 44 1.6% 2.8% 3.3% average in Regina CMA 137 138 139 140 0.4% 3.2% 1.8% thousands) Saskatoon CMA 169 170 168 165-1.0% 0.7% 0.5% Southeast (except Regina) 45 46 44 44 1.9% -4.1% -6.9% Swift Current/Moose Jaw region 53 54 53 52-0.8% 0.2% 0.6% West central (except Saskatoon) 28 29 27 26-1.5% -4.8% -4.1% East central (incl. Yorkton) 39 38 37 38-0.5% 9.0% 8.0% P.A./Northern Saskatchewan 100 100 99 96 0.6% -3.5% -4.3% Paid Workers and Weekly Earnings 2014 2015 2016 2017 Dec Jan year to Average Average Average Jan 2016 2016 date Number of Salaried 173.0 169.6 171.4 173.4 1.0% -1.4% -1.4% paid workers Hourly rated and part time 270.6 273.7 268.6 254.2-5.8% -0.9% -0.9% (000) Other (including commission) 40.9 40.8 38.8 37.6-6.1% -2.1% -2.1% Avg earnings/wk (incl overtime) Total 484.4 484.0 478.7 465.2-3.4% -1.2% -1.2% All paid employees $975.24 $981.61 $988.41 $1,013.10 0.2% 2.3% 2.3% Adjusted for inflation (constant $2002) $757.70 $750.76 $747.85 $761.16-1.0% 0.7% 0.7% Source: Statistics Canada Labour Force Survey and Survey of Employment Payroll and Hours pp = change in percentage points

Page 10 March 2017 Annual/monthly Totals or Averages Percentage changes: Wholesale Trade ($ millions) 2014 2015 2016 2017 Jan Feb year to Total Total Total Feb 2017 2017 date Food, beverage, tobacco products $1,852 $1,603 $1,588 $121 0.1% -8.7% -10.5% Farm products $1,738 $2,021 $1,485 $115 15.6% -7.0% 4.1% Agricultural supplies $8,269 $10,596 $8,574 $613-1.6% 15.2% 13.9% Machinery and equipment $8,224 $7,819 $7,737 $629 25.9% 34.3% 19.8% Building materials $2,169 $1,956 $1,952 $144-1.6% 0.8% 3.9% All other wholesale sales $4,452 $4,144 $3,985 $299-5.6% -5.9% -4.0% Wholesale sales total $24,851 $26,535 $23,733 $1,800 6.8% 13.6% 10.5% Wholesale sales (seasonally adjusted) $24,851 $26,535 $23,727 $2,210 3.1% 18.3% 12.8% 2014 2015 2016 2017 Jan Feb year to Total Total Total Feb 2017 2017 date New motor vehicle dealers $4,005 $3,856 $3,828 $286 1.4% 2.9% 2.7% Used vehicles, recreational vehicles, and auto parts $1,106 $1,083 $1,110 $69 9.0% -8.0% -5.8% Service stations $3,054 $2,496 $2,441 $185-12.0% 22.6% 23.2% Furniture and home furnishings stores $492 $496 $528 $37-8.3% -3.7% 1.2% Electronics and appliance stores $493 $492 $493 $29-5.6% -15.6% -10.2% Building materials, home centres, garden supplies $1,187 $1,232 $1,253 $63-10.6% -11.7% -7.5% Health and personal care stores $982 $988 $1,220 $93-9.1% 0.2% 5.0% Clothing, footwear, accessories $656 $668 $699 $43 3.1% -3.8% -4.1% Sporting goods, hobby, book and music stores $403 $415 $466 $26-2.9% -13.1% -11.9% Grocery stores $2,761 $2,696 $2,752 $197-0.9% -1.5% -5.3% Beer, wine and liquor stores $680 $737 $767 $46 3.1% -4.4% -5.4% General merchandise (incl dept stores) $3,106 $3,219 $3,225 $216-3.3% 12.3% 11.1% $348 $341 $352 $24 0.4% -1.4% -3.5% Retail Trade ($ millions) Vehicle related Household related Personal Other Other and Miscellaneous Retailers Retail sales total $19,274 $18,719 $19,135 $1,314-3.3% 2.7% 3.0% Retail sales (seasonally adjusted) $19,274 $18,719 $19,135 $1,677 0.6% 4.8% 4.3% Motor Vehicle Unit Sales (number of units sold) 2014 2015 2016 2017 Jan Feb year to Total Total Total Feb 2017 2017 date Passenger cars 12,293 10,631 9,266 612 31.6% -0.6% -2.4% Trucks/SUVs/vans/commercial vehicles 46,141 44,642 42,833 3,170 5.1% 15.7% 11.9% All vehicles 58,434 55,273 52,099 3,782 8.6% 12.7% 9.5% International Merchandise Trade (millions of Canadian $) 2014 2015 2016 2017 Jan Feb year to Total Total Total Feb 2017 2017 date Merchandise Imports $12,135 $10,389 $9,028 $857-9.8% 8.4% 8.1% Merchandise Exports $35,277 $32,532 $26,613 $2,591-12.7% 3.5% 8.2% Net International Merchandise Trade $23,142 $22,143 $17,584 $1,734-14.1% 1.2% 8.2% Consumer Price Indices (2002=100) 2014 2015 2016 2017 Feb March year to Average Average Average March 2017 2016 date Purchased from stores 137.2 143.1 143.8 141.5 1.1% -3.5% -4.4% Food Purchased from restaurants 139.9 143.4 145.8 147.6 0.0% 1.6% 1.9% Food total 138.1 143.4 144.5 143.4 0.8% -2.1% -2.7% Clothing and footwear 97.1 98.8 98.6 100.8 2.4% 0.0% 0.2% Transportation 122.4 120.1 121.8 124.1-0.8% 3.0% 5.5% Shelter, owned or rented 154.4 158.7 160.5 162.6 0.1% 1.6% 1.5% Household operations and furnishings 110.5 112.4 114.4 111.1-0.6% -2.8% -1.9% Health and personal care 117.9 119.7 121.3 121.8-0.4% 0.7% 1.0% Recreation, education, and reading 109.2 111.4 111.6 113.6 0.2% 1.3% 1.8% Alcohol and tobacco 158.4 161.8 166.3 170.0 1.0% 3.0% 2.4% Saskatchewan all items 128.7 130.8 132.2 133.0 0.1% 0.6% 1.2% Regina all items 129.7 131.5 132.9 133.7 0.0% 0.6% 1.3% Saskatoon all items 128.6 131.0 132.6 133.5 0.0% 0.6% 1.2% Sources: Statistics Canada (retail/wholesale trade, consumer price index, motor vehicle sales), Strategis International Trade Database (international trade

Page 11 March 2017 Annual/monthly Totals or Averages Percentage changes: date of most from from same most 2014 2015 2016 recent previous period year to recent Agriculture period period last year date period Farm cash Crops $9,834 $11,197 $2,335 17.3% -8.9% 4.8% receipts Livestock $2,711 $2,644 $394-5.9% -35.1% -22.6% ($ millions) Program payments $612 $585 $66 12.2% -36.8% -34.6% Q3 Total cash receipts $13,156 $14,426 $2,795 13.3% -14.6% -1.4% Farm product Crops 104.4 118.1 122.4 117.2 1.6% -8.3% 3.6% price index Livestock and products 197.8 224.1 178.4 168.8 8.3% -9.9% -20.4% Dec (2007=100) All products 121.0 136.9 134.1 129.0 4.7% -8.2% -2.0% Canola ($/tonne) $408 $444 $454 $482-0.4% 8.7% 7.6% Market Field peas ($/tonne) $10.10 $8.33 $8.84 $8.06-10.0% -11.5% -6.2% Prices 700-800 lb. feeder steers $/lb. 210.0 257.2 188.9 174.7 4.1% -16.0% -20.9% Mar Index 100 hog prices, $/100 kg $207 $158 $149 $168-1.6% 9.7% 7.4% Resource Production, Consumption, Price Crude oil production (000 m³) 29,891 28,224 26,732 2,169-8.2% -0.7% 0.4% Feb Natural gas production (mm³) 5,825 5,794 5,358 560 27.8% 25.0% 8.4% Feb Production & Potash (000 tonnes): Canada 10,955 11,420 9,804 922-10.1% 12.7% 27.1% Feb volumes Uranium (000 kg): Canada 9,780 13,279 14,133 490-54.8% -53.7% -35.7% Feb Motor gasoline sales (000 m³) 2,844 2,780 2,857 126-8.8% -0.2% -0.2% Jan West Texas interm. crude oil US$/bbl $93.26 $48.69 $51.77 $49.33-7.7% 31.4% 56.0% Mar Edmonton par crude oil C$/m3 $591 $359 $407 $396-4.6% 81.7% 66.7% Mar Regular gas ( /litre) Regina retail 121.1 100.1 91.3 92.4-1.1% 6.3% 19.6% Mar Prices Regular gas ( /litre) Saskatoon retail 121.0 100.6 91.2 92.4-1.8% 9.5% 22.2% Mar Uranium long-term price US$/lb. $46.46 $46.29 $39.00 $33.99 3.0% -21.9% -24.3% Mar Potash (2002=100) 100.7 114.0 99.3 86.3-0.7% -26.2% -27.7% Feb Natural gas, Alberta spot market price (dollars per gigajoule) $4.00 $2.42 $1.83 $2.39-16.4% 31.3% 33.6% Feb Manufacturing Sales ($ millions) Non-durable Food products $3,346 $4,226 $338-9.2% 11.0% 18.8% Goods Chemical products $2,281 $2,202 $2,098 $312-25.7% 29.9% 7.2% Other non-durable goods $3,885 $3,580 $314-2.2% 49.1% 49.1% Total non-durable goods manufacturing $10,458 $9,432 $9,905 $964-13.4% 27.7% 21.7% Durable Machinery manufacturing $1,491 $1,164 $1,181 $103 19.8% -9.2% -1.3% Goods Fabricated metal products $834 $690 $662 $46-2.3% -9.0% -4.2% Other durable goods $3,097 $2,796 $2,514 $232 5.2% 19.4% 7.4% Total durable goods manufacturing $5,422 $4,650 $4,357 $380 7.7% 6.3% 3.5% All manufacturing groups $15,880 $14,082 $14,262 $1,344-8.3% 20.8% 16.4% Capital Construction Price Index Structural products 108.1 109.0 111.2 114.2 0.5% 3.5% 3.0% Sask Trends Architectural products 106.2 109.3 111.8 112.9 0.1% 1.3% 1.4% Monitor Mechanical products 106.2 109.2 112.2 112.6 0.1% 0.3% 0.6% Capital Electrical products 104.4 105.6 105.7 106.4 0.4% 0.1% -0.3% Construction Equipment and operating 119.5 106.1 101.0 106.2 0.4% 11.8% 10.3% Price Index Total material costs 108.9 107.9 108.4 110.5 0.3% 3.2% 2.8% (2010=100) Labour costs 116.7 120.6 127.3 126.2 5.4% -2.6% -4.3% Total material and labour 112.8 114.2 117.9 118.3 2.9% 0.0% -1.0% Construction Residential Urban (population > 10,000) 7,152 4,334 3,877 287 6% 49% 11% Mar housing starts Rural 1,104 817 898 222-34% 1% 10% Q4 (# of units) Provincial total 8,257 5,149 4,775 1,159-29% -15% -7% Q4 Residential $1,574 $1,174 $1,025 $56.6 22% 16% 10% Value of Industrial & commercial $877 $1,033 $593 $80.3 88% 184% 122% building Institutional & government $218 $676 $353 $27.0 1864% 19% -11% permits Provincial total $2,669 $2,883 $1,971 $163.8 81% 64% 40% Feb ($ millions) Regina $706 $795 $681 $35.2 17% -32% -13% Saskatoon $1,100 $1,246 $867 $65.8 55% 77% 34% Other provincial $862 $842 $422 $62.9 246% 463% 217% Sources: Statistics Canada, Saskatchewan Agriculture, CMHC, Sask Economy Feb Feb

Page 12 March 2017 Population and Migration Interprovincial migration International migration Natural growth Annual/monthly Totals or Averages Percentage changes: date of most from from same most 2014 2015 2016 recent previous period year to recent data period last year date data Into Saskatchewan 18,155 18,686 16,934 2,662-39% -13% -9% Out of Saskatchewan 20,707 23,088 22,578 3,777-40% 7% -2% Net flow -2,552-4,402-5,644-1,115 Immigrants 11,826 12,521 14,860 2,914-16% 2% 19% Emigrants 1,060 1,066 1,068 177-53% 0% 0% Net flow 10,766 11,455 13,792 2,737-12% 2% 20% Q4 Births 15,606 15,838 16,114 3,919-7.3% 1.8% 1.7% Deaths 9,432 9,530 9,660 2,526 5.6% 1.7% 1.4% Net natural growth 6,174 6,308 6,454 1,393-24.2% 2.1% 2.3% Population at end of period (000) 1,127.8 1,141.1 1,158.3 1,158.3 0.3% 1.5% 1.5% Canadian Commodity Price Indices (2010=100) Raw materials price index 117.6 94.1 89.8 101.1 1.2% 23.7% 23.4% Industrial products price index 111.3 110.3 110.1 113.0 0.1% 3.5% 3.0% Feb Other Selected Time Series Cross border traffic (000 of person-trips) Airport takeoffs and landings Sask residents, same day auto 175 131 122 8.6 5.3% 13.6% -3.1% Sask residents, 2+ days, auto 190 150 141 8.9 4.2% 17.1% 13.5% Sask residents returning, all modes of travel, all countries 613 488 438 49.6 5.5% -2.4% -6.1% Arrivals by out-of-country visitors 132 120 117 4.3-7.1% -27.5% -20.6% Saskatoon 91,160 94,990 92,528 7,127 14.9% 3.6% 3.6% Regina 58,168 57,382 52,202 3,700 3.3% -2.1% -2.1% Restaurant and tavern receipts ($M) $1,802 $1,854 $1,864 $145-8.1% 2.9% 2.9% Jan Regular employment insurance beneficiaries 10,027 12,700 18,660 20,600-1.2% 9.3% 13.2% Feb Job vacancies (excl government), 3 month moving average 9,000 6,425 6,025 5,900 3.5% 13.5% -12.2% Dec Consumer bankruptcies 1,105 1,155 1,421 117-3.3% 28.6% 28.6% Business and farm bankruptcies 77 85 91 6-33.3% -33.3% -33.3% Jan Prime rate 3.00% 2.78% 2.70% 2.70% 0.00%pp 0.00%pp 0.00%pp Mar Financial TSE composite index 14,712 14,270 14,194 15,548 6.6% 15.2% 16.2% Mar statistics Exchange rate (US ) 90.6 78.3 75.5 74.7-2.1% -1.2% 3.8% Mar Weather (data based on the twelve months from September to August) Precipitation in mm Mean daily temperature Annual/monthly Totals or Averages Changes date of Sep-2013 Sep-2014 Sep-2015 from from YTD most to Aug- to Aug- to Aug- Mar Mar Mar from recent 2014 2015 2016 2017 Normals 2016 2014-15 data Estevan/Regina/Swift Current 441 301 503 13-36% 42% 5% Yorkton/Saskatoon/Lloydminster 421 412 427 14-6% 2% -23% Prince Albert/La Ronge 542 486 514 42 135% 4% -18% Estevan/Regina/Swift Current +1.7 +4.1 +6.0-3.8 +0.1ºC -5.0ºC -2.5ºC Mar Yorkton/Saskatoon/Lloydminster +0.5 +3.0 +4.5-6.5-0.5ºC -4.0ºC -1.5ºC Prince Albert/La Ronge -1.5 +1.0 +2.9-9.7-1.7ºC -4.7ºC -1.5ºC pp = change in percentage points Sources: Statistics Canada, Industry Canada, Transport Canada, Environment Canada Feb Jan Sask Trends Monitor is published monthly by QED Information Systems Inc. Reproduction of the newsletter in whole or part is prohibited unless credit is given to Sask Trends Monitor. Data are obtained from what are considered reliable sources but are subject to periodic, retroactive, revisions. Additional detail about the sources and methodology is available on request. Comments on and suggestions for the material or the articles are always welcome. Subscription information is available from: Subscription Prices: ATTN: Douglas H. Elliott Annual electronic subscription: $210/year + GST Sask Trends Monitor Annual paper subscription: $275/year + GST 444 19th Avenue Regina, Saskatchewan Phone: (306) 522-5515 S4N 1H1 Facsimile: (306) 522-5838 Website: www.sasktrends.ca Email: sasktrends@sasktel.net