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Weekly UpdatesSaskatoon's economy continued its strong pace in the second quarter of 2008, with business investment and consumer confidence remaining steady. Highlights of SREDA's quarterly report included a relatively constant rise in employment numbers, building permits and construction starts. Housing starts also continued to exceed expectations set early in the year.
Labour market growth rising steadily
The strength of the Saskatoon and Saskatchewan economy is shown by the fact that there have never been more people working in the city and province than in June of 2008. Employment numbers increased in the second quarter of the year, but not as significantly as in previous years, partially due to a tight labour market. As seasonal jobs are filled, an increase in full-time positions (+2.7%) is offset by decreases in part-time positions (often not job losses, rather increases in hours).
Year-over-year, regional and provincial employment numbers are up. The Saskatoon region experienced an increase of 3,400 people working in 2008 Q2 compared to 2007 Q2. As employment numbers increased faster than the population, the region experienced a decrease in the unemployment rate.
Building permit numbers also growing
The number of building permits for new projects grew substantially in the second quarter of 2008, causing year-to-date non-residential construction totals to surpass those of the second quarter of 2007 by 40 per cent. The city of Saskatoon had a large increase in industrial permits (57 per cent), as well as permits for new institutional buildings such as hospitals and other health care facilities. Investment in infrastructure also contributed to an increase in non-residential construction. Communities bordering Saskatoon also experienced a boost in non-residential construction, (196 per cent) compared with 2007 numbers. This was due to augmented investment in the commercial, industrial, institutional and agricultural sectors.
Housing starts
The Saskatoon region residential construction market continued to grow in the second quarter of 2008. Permit values are higher in the region (+5.6%) compared to the same time frame in 2007, thanks in part to increased construction in the surrounding areas of the city. The value of permits for new single family dwellings are up (+14%) compared to the midyear mark in 2007. The decrease in condo conversions in the city of Saskatoon has played a part in the slight drop of the value of residential permits (-1.9%). Nonetheless, the region continues to be a hotbed of construction activity, with housing starts exceeding projections set in late 2007.
New and existing housing markets grow
The Saskatoon region residential new housing market has continued to experience growth in 2008. The year 2007 had the highest annual total housing starts since 1983, and the second quarter of 2008 exceeded the 2007 midyear mark by 30 per cent. A majority of the growth in the region can be attributed to multiple-family starts (apartments/townhouses). With an overall vacancy rate of 0.6 per cent in the Saskatoon CMA, and new incentives for construction, the region's market is attractive for developers looking to invest in a solid market.
Strong sales have prompted many owners to place their house on the market. The first six months of 2008 saw a 50 per cent increase in listings and a 27 per cent decrease in sales compared to the first half of 2007. Nonetheless, housing prices have increased during the past 12 months (+30%), with 2008 Q2 posting a 13 per cent gain. An average dwelling in Saskatoon cost $306,060 in 2008 Q2.
The Saskatoon Regional Economic Development Authority (SREDA) Inc. is dedicated to the attraction, retention, growth and expansion of opportunities in the Saskatoon economic area. For more information go to www.sreda.com or contact us at info@sreda.com.
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