Know
Your Region: The Economy
In
this section we examine some of the traditional measures of
economic activity as they apply to the Southwest region. Some
of these, such as employment and personal income, are generally
quite
reliable for sub-provincial regions such as the Southwest. Others
such as the size of the regional economy are less reliable and
others such as capital investment and export activity are simply
not available except for the province as a whole.
In
particular, section 4.1 contains an estimate of the size of
the economy in the Southwest region using the Gross Domestic
Product (GDP), a traditional measure of the size of an economy.
Section 4.2
has extensive information about employment among residents in
the Action Southwest region including a breakdown by industry
group. Employment insurance data specific to the region is presented
in
Section 4.3.
The
number of business establishments located in the region is broken
down by their size, location, and industry group in Section
4.4. One of the key economic indicators for individuals is their
personal income and information from income tax records and
the Statistics Canada census is used to examine trends in personal
income among the region’s residents in Section 4.5. As
one indication of capital investment, the last section documents
major capital projects planned or in progress in the region.
The
main findings in this section are summarized below in point
form.
Gross
Domestic Product
• It is not possible to develop a reliable estimate of
the size of the economy in sub-provincial regions because the
necessary data are not available. Two estimates are derived
in this section; one uses
share of employment and the other uses an econometric model.
Using either methodology, agriculture is the largest industry
in the region.
• Using the share of provincial employment as an estimator,
the size of the economy in the Southwest region was approximately
$1.7 billion in 2003. Using the econometric model, the size
of the economy was approximately $2.5 billion in 2003.
• A theoretical $1 million investment in a new capital
project in the region would have the largest impact on employment
if it was made in the “personal and household services”
or “arts, entertainment, and recreation” sectors.
It would have the largest impact on the GDP if it was made in
agriculture.
Employment
• The economic region used by the monthly Labour Force
Survey (LFS) is larger than the Action Southwest region and
includes the city of Moose Jaw. The LFS data is included in
this section because it is more up-to-date than the information
from the Census.
• In the past twenty years, the adult population in this
region has fallen by approximately 9,000 persons whereas the
number of people employed has dropped by only 2,600. In other
words, a higher percentage of the population is employed now
than in the past.
• Employment is switching from part-time to full-time.
Full-time jobs now constitute 81% of those employed in the region
compared with 73% in 1993.
•
Agriculture is the largest of the industries in terms of employment
in spite of declines in the past decade. Total employment in
agriculture was 10,200 in 2007 – 19% of total employment.
The second largest industry group is the retail/wholesale trade
group and the third is the health and social services group.
• Over the past twenty years, there have been significant
employment declines in three industry groups – agriculture,
education services, and public administration. These have been
countered by increases in manufacturing, the professional services
group, and the finance and insurance group.
• In the recent 2004 to 2007 period, there have been employment
declines in educational services and public administration but
employment in agriculture has increased. The leading industry
groups are now construction and the transportation/warehousing
group which join the professional services group with above-average
growth rates.
• Employment information from the Statistics Canada Census
is more specific to the Action Southwest region but is less
current.
• As of May 2006, there were just under 27,000 people
employed compared with more than 54,000 in the larger LFS economic
region.
• The employment rate of 69.5% is higher in the Southwest
than in the province as a whole or in other rural areas. It
is particularly high among those 15 to 24 years of age.
• The number of self-employed persons is declining, largely
because of the drop in the number of self-employed farmers.
In spite of this, the region has more self-employed and fewer
paid employees than other parts of the province.
• In spite of declining employment over the past 15 years,
agriculture still accounts for 30% of employment in the region.
This is much higher than the 12% for the province as a whole
or the 19% in rural Saskatchewan. After agriculture, the next
largest industry group is retail trade which accounts for 9%
of employment.
• Relative to other rural parts of Saskatchewan, the region
has lower levels of employment in construction, business services,
and health care.
• Commuting to work is less common than in other rural
areas because a large proportion of the employed work at home
or in their local community. Among commuters, 87% drive to work
and 12% use a bicycle or walk.
Unemployment and Employment Insurance
• The number of employment insurance beneficiaries dropped
dramatically during the period from the mid 1980s to the mid
1990s but this was largely because of a tightening of eligibility
requirements.
From 1997 to 2007, the number of regular beneficiaries has been
effectively constant near 1,500 per month.
• The decline from 1987 to 1997 and the subsequent stability
was also evident in the province as a whole, suggesting that
the number of beneficiaries may be related as much to program
eligibility
requirements as it is to economic conditions.
• The pattern in the number of beneficiaries is similar
across different parts of the Southwest.
Number
of Businesses and Employers
• There were just under 9,000 business establishments
in the Action Southwest region at the end of 2006. The majority
of these have no employees because they are small farming operations
or are holding companies. Removing them leaves 2,869 establishments
that are “employers”.
•
The region has a disproportionately large number of employers
compared with other rural parts of Saskatchewan. In 2006, there
were 59 employers in the Action Southwest region per 1,000
population compared with 38 per 1,000 in rural Saskatchewan
and 40 per 1,000 in the province as a whole.
• The number of employers has dropped 10% in the five
years ending in 2006. The drop has been concentrated among smaller
employers; the number with twenty or more employees has increased
over the period.
• Larger employers tend to be located in larger communities.
Swift Current, for example, has 53% of employers with twenty
or more employees but only 25% of those with fewer than five
employees.
• Agriculture has the largest number of employers in the
region, accounting for 30% of the total. The next largest number
of employers are in retail trade, professional services, and
personal/household services.
• From 2001 to 2006, the number of employers dropped by
10% with even larger declines in agriculture, accommodation
and food services and in transportation. The number of employers
increased significantly over the period in the resource sector,
in finance and insurance, and in the health and social services
group.
Personal
Income and Poverty
• In 2005, aggregate personal income before taxes in the
Action Southwest region totalled $913 million which is just
under 10% of the personal income in rural Saskatchewan and about
4% of the personal income in the province as a whole.
• Approximately 70% of individual income in the Southwest
comes from work, that is, from paid employment and self-employment
earnings. This is a similar proportion as in other rural areas.
• Incomes in the Southwest are losing ground to those
in the other parts of Saskatchewan in the sense that the average
is not growing as quickly. In the ten years from 1995 to 2005,
for example, the
average individual income has grown by 2.7% in the Action Southwest
region. This compares with 3.4% for the province as a whole
and 3.3% for rural Saskatchewan.
• The lower average incomes in the Southwest are generally
the result of fewer individuals and households with very high
incomes rather than a high proportion of people with low incomes.
• Average earnings from employment among part-time or
part-year workers in the Action Southwest region are similar
to those in the province as a whole. Among those who worked
full-time throughout 2005, however, incomes are below the average
in other rural areas and below those in the province as a whole.
• In 2005, 14.4% of individuals in Saskatchewan lived
in low income households. In rural Saskatchewan, the proportion
is somewhat lower at 14.1% whereas in the Action Southwest region,
the proportion is lower still, at 11.3%. The incidence of low
income has stabilized in the Action Southwest region after declining
in the 1990s.
• The average market value of owner-occupied, non-farm,
non-Reserve dwellings in the Action Southwest region was $93,500
in May 2006 which is below the Saskatchewan average of $132,110
and also below the $102,960 average in rural Saskatchewan.
• Data from income tax records show that the average gross
income for the 36,750 tax filers in the Action Southwest region
was just under $27,000.
• In the mid 1990s the average income per tax filer in
the Southwest was near the provincial average but a decade of
little or no growth in real terms has widened the gap. By 2005,
the average in the region was near the average in rural Saskatchewan
and 9% below the provincial average.
• Tax filers in the Southwest are more likely to report
income from employment – 80% do so compared with 76% provincially
– and less likely to report income from employment insurance,
social assistance, or workers’ compensation. They are
also more likely than those in other parts of Saskatchewan to
report investment income and income from private pensions.
Major
Projects Inventory
• According to information compiled by the Ministry of
Enterprise and Innovation in 2008, a total of $326 million in
major capital projects (excluding oil/gas exploration) specific
to the Action Southwest region are either in the planning, design,
or construction phase.
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