A recent TBnewswatch story reported the estimated value of building permits in Thunder Bay in 2017 was up substantially from the year before at 146 million dollars. Based on the numbers presented in the story, the increase in 2017 can be calculated at approximately 55 percent. This is of course an upbeat year end story. Given the coming year will see both a provincial and municipal election, one can expect these types of numbers to be presented by local politicians as evidence that Thunder Bay's economy is doing well. However, it is important to adjust these kinds of number for inflation - that is present them in real dollars - as well as look at more than two years of data.
This is done in Figure 1. Using annual total value of building permit numbers from Statistics Canada for 1998 to 2016 and adding the 2017 estimate from the City of Thunder Bay's Chief Building Official and then deflating using the CPI, the real value (in 2016 dollars) of total building permits is presented. The good news is that 2017 is indeed up from 2016 but there has been an overall downward trend from peaks in real value reached in 2012 and 2013. Over a longer term view, a fitted linear trend suggests that there has been a slight increase in the real value of permits since the late 1990s but the 2017 performance is really not much higher than a decade ago or even two decades ago.
One can view the above chart as good news in the sense that construction activity over time in Thunder Bay over the long haul has been reasonably stable and perhaps even characterized by some very modest growth. It should be noted that this activity is composed mainly of residential followed by institutional and government construction projects. Indeed, the peaks in Figure 1 are much less impressive once you remove the government and institutional permit values.
The composition of these permits is provided in Figures 2 and 3. Figure 2 presents an area graph based on annual numbers while Figure 3 simply aggregates all the permits since 1998. Nearly thirty percent building permits since 1998 are of institutional and public sector origin. Industrial permits are below 10 percent. Commercial permits have been surprisingly large as a proportion of the total which is actually a cause for some optimism given that they reflect private sector perceptions of economic opportunities in Thunder Bay.
Northern Economist 2.0
Wednesday 27 December 2017
Thursday 14 December 2017
Thunder Bay Employment Flat for Forty Years
My recent
Fraser Institute Blog post on employment growth in Canada at the provincial and
CMA level since 2007 appears to have attracted a fair amount of interest if
only based on the hits via my Linkedin page.
The article was posted on the Fraser Blog on December 4th and
by December 14th, it had garnered 1,515 views. The interest has been quite pronounced from
Linkedin profiles in Ontario and of course particularly from the Thunder Bay
area. As a follow-up, I decided to look at employment levels in Thunder
Bay and Greater Sudbury from a longer-term perspective using data from
Statistics Canada.
Now
Statistics Canada has annual province level unemployment rates and employment
data available on its site from 1976.
Its annual CMA level data only appears to go back to 1987. So, in order to generate CMA employment
levels and unemployment rates for Thunder Bay and Greater Sudbury prior to
1987, what I did (acting on the suggestion of my Lakehead colleague Rob Petrunia) was run regressions of CMA level employment and unemployment rates
for both cities on the Ontario data along with a time trend
variable. The assumption is that
employment levels and unemployment rates in the two cities should reflect what
is going on in the province as a whole. The regression results were then used
to estimate fitted values for Thunder Bay for the period 1976 to 1987 and for
Sudbury from 1976 to 1990 (Sudbury data starts in 1990).
The results
are intriguing. Figure 1 plots the
unemployment rates in the two cities from 1976 to 2016 and there seems to be
some good news here. While unemployment
rates in both cities fluctuate a great deal over time, they have generally
trended downwards since the late 1970s.
The average unemployment rate in Thunder Bay between 1976 and 1985 was 9.7
percent while in Sudbury it was 11 percent.
Over the period 2010 to 2016, Thunder Bay’s unemployment rate was 6.1
percent while over the same period in Sudbury it was 7.5 percent.
However,
the good news seems to end when employment levels are examined in Figure 2 – at least for
Thunder Bay. Sudbury has seen its
employment grow over time while Thunder Bay has essentially remained flat. In
1976, estimated total employment (full and part time) in Thunder Bay was 61,224 and in Sudbury it was
60,475. By 2016, Thunder Bay’s
employment was 60,100 while in Sudbury it was 81,700. In other words, over 40 years Thunder Bay has
essentially remained flat in terms of its employment level – indeed there has
been a slight decline of 2 percent since 1976.
As for Sudbury, its employment level has grown by 36 percent since its
estimated 1976 value.
A declining
unemployment rate when total employment is growing can be seen as good news. A declining unemployment rate when total
employment is declining means that your labour force is actually shrinking
faster than your employment level. For
Sudbury, a lower unemployment rate is good news given that it has been
accompanied by rising employment. For
Thunder Bay, a declining unemployment rate is a misleading indicator and masks
the moribund nature of its economy given that its employment level has been essentially
the same for 40 years.
Saturday 9 December 2017
Economic News Around the North, December 9th Edition
Winter finally arrived here in Thunder Bay this week with a plethora of snow, cold and ice. I left for a short trip to Montreal on Monday afternoon with rain and warm temperatures and returned the next evening to a winter wonderland. What better way to spend a cold Saturday here than by warming up the house with homemade pizza....
Without further ado, here are some of the stories making the economic news recently in northern Ontario.
Rising tourism boosts local economy. TBNewswatch, November 25th, 2017.
This is yet another positive economic impact story. However, tourism falls far short of the economic impact of Lakehead University as one recalls from this past story.
The Ring of Fire and its associated "production facility" have also been making the news again in the region.
Sault mayor confident in Ring of Fire Smelter pitch. Northern Ontario Business. November 21st, 2017.
Smelter won't go where it's not wanted, Noront. Northern Ontario Business, December 6th, 2017.
The smelter (or the "production facility") is seen as providing volume that would make the troubled Ontario Northern Railway more viable....
Noront facility could make ONR viable: Timmins councillor, Sudbury Star. December 9th, 2017.
Of course, if you don't get the smelter, there is always the option of storing nuclear waste. Ignace, Manitouwadge and Hornpayne are all still in the running along with two sites near the Bruce Reactor - South Bruce and Huron-Kinloss.
Nuclear fuel bunker shortlist includes 2 sites near Bruce reactor. CTV News Kitchener. December 6th, 2017.
Despite the allure of smelters and nuclear waste disposal sites, there is still a search for economic visions in the north. The Sault is obviously taking the lead in what is one of northern Ontario's booming sectors - economic development consultants.
Sault Ste. Marie seeks economic development vision. TheSudburyStar.com. December3rd, 2017.
And another economic development vision seems to be in the offing in Timmins....
Bolivian economic development group in Timmins. Timminspress.com. November 27th, 2017.
On a positive note....
Sudbury adds 600 jobs in November. TheSudburyStar.com. December 2nd, 2017.
However, Sudbury's unemployment rate edged up slightly to 6.2 percent from 6.1 percent. Meanwhile, Thunder Bay's rate also went up to 6.1 percent from 5.8 percent the previous month.
Another item of relevance to northern Ontario.
Indigenous youth key to Canada's economic growth. Business Vancouver. December 5th, 2017.
Have a great weekend! Its time to enjoy the pizza.
Without further ado, here are some of the stories making the economic news recently in northern Ontario.
Rising tourism boosts local economy. TBNewswatch, November 25th, 2017.
This is yet another positive economic impact story. However, tourism falls far short of the economic impact of Lakehead University as one recalls from this past story.
The Ring of Fire and its associated "production facility" have also been making the news again in the region.
Sault mayor confident in Ring of Fire Smelter pitch. Northern Ontario Business. November 21st, 2017.
Smelter won't go where it's not wanted, Noront. Northern Ontario Business, December 6th, 2017.
The smelter (or the "production facility") is seen as providing volume that would make the troubled Ontario Northern Railway more viable....
Noront facility could make ONR viable: Timmins councillor, Sudbury Star. December 9th, 2017.
Of course, if you don't get the smelter, there is always the option of storing nuclear waste. Ignace, Manitouwadge and Hornpayne are all still in the running along with two sites near the Bruce Reactor - South Bruce and Huron-Kinloss.
Nuclear fuel bunker shortlist includes 2 sites near Bruce reactor. CTV News Kitchener. December 6th, 2017.
Despite the allure of smelters and nuclear waste disposal sites, there is still a search for economic visions in the north. The Sault is obviously taking the lead in what is one of northern Ontario's booming sectors - economic development consultants.
Sault Ste. Marie seeks economic development vision. TheSudburyStar.com. December3rd, 2017.
And another economic development vision seems to be in the offing in Timmins....
Bolivian economic development group in Timmins. Timminspress.com. November 27th, 2017.
On a positive note....
Sudbury adds 600 jobs in November. TheSudburyStar.com. December 2nd, 2017.
However, Sudbury's unemployment rate edged up slightly to 6.2 percent from 6.1 percent. Meanwhile, Thunder Bay's rate also went up to 6.1 percent from 5.8 percent the previous month.
Another item of relevance to northern Ontario.
Indigenous youth key to Canada's economic growth. Business Vancouver. December 5th, 2017.
Have a great weekend! Its time to enjoy the pizza.
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