Greater Vancouver Economic Scorecard Report Overview
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Greater Vancouver Economic Scorecard Report Overview Dr. Daniel F. Muzyka President and Chief Executive Officer The Conference Board of Canada Why a Regional Scorecard? A regional scorecard: • Provides an evidence-based foundation for performance evaluation • Identifies areas for performance improvement • Defines areas for further growth • Helps set the agenda • Helps track progress 2 Purpose of Greater Vancouver Scorecard • Major trends: globalization, rise of Asia, knowledge economy, aging population. • Greater Vancouver, like all major cities, is in a global competition for talent and investment. • Scorecard’s purpose is to assess Greater Vancouver’s relative strengths and weaknesses in socio-economic performance. • Also provides evidence-based research for GVBOT’s policy analysis. 3 Agenda • Global economic context • National economic context • Impact on Greater Vancouver • Greater Vancouver defined and compared • Scorecard results • Greater Vancouver’s traded clusters • The region’s risks and challenges 4 World Real GDP Growth per cent change 4.0 3.0 2.0 1.0 0.0 -1.0 -2.0 1991 93 95 97 99 01 03 05 07 09 11 13 15 17f Source: Consensus Economics. 5 Tepid Global Growth an Impediment to Improving Exports per cent change 8.0% 7.0% 6.0% 5.0% 4.0% 2015 3.0% 2016 2.0% 2017 1.0% 0.0% -1.0% United China United Euro zone Japan Latin Hong Kong Total Trade States Kingdom America Weighted GDP Source: Consensus Economics. 6 Gateway to Asia • The 11 TPP countries account for almost 2/3 of B.C.’s trade. • Japan is still the number three economy, even if growth is stalled. • Free trade agreement with India is in the works. – Emerging markets have slipped: • China will struggle to grow by 7 per cent next two years. • Brazil and Russia in recession. • But Indian performance has recently improved. 7 China: Real GDP Growth and Inflation per cent change Real GDP Growth Inflation 12.0 12.0 10.0 10.0 8.0 8.0 6.0 6.0 4.0 4.0 2.0 2.0 0.0 0.0 -2.0 -2.0 03 04 05 06 07 08 09 10 11 12 13 14 15 16f 17f Source: Consensus Economics. 8 China’s Global Influence per cent share of global consumption (2014) 60 55 50 45 40 35 30 25 20 15 10 5 0 iron ore aluminum nickel steel copper zinc soybeans oil Source: World Bank. 9 Auto Sales in China millions, passenger vehicles 18.0 16.0 But the country is shifting to the 14.0 consumption of products and services. 12.0 10.0 8.0 6.0 4.0 2.0 0.0 2008 2009 2010 2011 2012 2013 2014 2015 Source: Statistica 2016. 10 India: Real GDP Growth and Inflation per cent change Real GDP Growth Inflation 12.0 12.0 10.0 10.0 8.0 8.0 6.0 6.0 4.0 4.0 2.0 2.0 0.0 0.0 03 04 05 06 07 08 09 10 11 12 13 14 15f 16f Source: Consensus Economics. 11 Agenda • Global economic context • National economic context • Impact on Greater Vancouver • Greater Vancouver defined and compared • Scorecard results • Greater Vancouver’s traded clusters • The region’s risks and challenges 12 Canada’s Real GDP Growth per cent change 4.0 3.0 2.0 1.0 0.0 -1.0 -2.0 -3.0 03 04 05 06 07 08 09 10 11 12 13 14 15 16f 17f 18f Sources: Statistics Canada; The Conference Board of Canada. 13 The Resource Decade—Real GDP by Province average annual compound growth, per cent 2004-14 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 NL PEI NS NB Que Ont Man Sask Alta BC Sources: Statistics Canada; The Conference Board of Canada. 14 The Resource Crash—Real GDP by Province average annual compound growth, per cent 2015-18 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 NL PEI NS NB Que Ont Man Sask Alta BC Sources: Statistics Canada; The Conference Board of Canada. 15 Canada’s Aging Demography and the Knowledge Economy • To replenish the workforce, Canada needs to add more highly skilled workers and replace retirees: – Invest in education— increase the skills and participation of the workforce. – Raise levels of immigration and speed up integration. 16 Canada’s Retirement Rate per cent share of the labour force (1976-2018) 1.40 1.30 1.20 1.10 1.00 0.90 0.80 0.70 0.60 Sources: The Conference Board of Canada; Statistics Canada. 17 Canada’s Employment Gains level change in 000’s (2004-14) 1,200 1,000 1,165 800 892 600 400 200 77 368 0 -200 -400 -559 -600 Resources, Manufacturing Construction Health, Education, Business Utilities and Public Admin Services Agriculture Sources: The Conference Board of Canada; Statistics Canada. 18 Agenda • Global economic context • National economic context • Impact on Greater Vancouver • Greater Vancouver defined and compared • Scorecard results • Greater Vancouver’s traded clusters • The region’s risks and challenges 19 Impact on Greater Vancouver • Greater Vancouver’s economy has been strong and the outlook is bright. • Why the optimism? – Expect more agglomeration: • Knowledge workers cluster. • Immigrants tend to settle in large cities. – Given globalization/Asia-Pacific growth/TPP—―Gateway‖ dynamics will increase. 20 Real GDP Growth by CMA: 2006-15 average annual per cent change Saskatoon 3.9 Edmonton 3.9 Regina 3.8 Calgary 2.8 Vancouver 2.5 Winnipeg 2.1 Québec 2.0 Toronto 1.9 Halifax 1.6 Ottawa-Gatineau 1.6 Canada: 1.6% Montréal 1.4 Victoria 1.2 Hamilton 0.9 Source: The Conference Board of Canada. 21 Where the Jobs are Being Created in Canada level change in 000’s (April 2016 over April 2015) Vancouver 94.2 Toronto 90.8 Rest of Canada -41.0 Sources: Statistics Canada; The Conference Board of Canada. 22 Contribution to Growth over 2006-15 Vancouver (percentage added to total real GDP growth) Finance, Insurance & Real Estate 1.1 Wholesale & Retail Trade 0.3 Construction 0.2 Business Services 0.2 Health & Education 0.2 Transportation & Warehousing 0.1 Vancouver’s economy expanded Public Administration 0.1 by 2.5 per cent per year between Personal Services 0.1 2006 and 2015. Resources, Utilities & Agriculture 0.1 Information & Culture 0.0 Manufacturing 0.0 Source: The Conference Board of Canada. 23 Vancouver to be Canada’s Growth Leader • Vancouver is expected to lead all major CMAs in economic growth between 2016 and 2020. • Vancouver’s status as the Gateway to Asia and the continued rise of the Asia-Pacific region bodes well for local trade and transportation outlook. • Local trade outlook will also be buoyed by healthy U.S. economy. • Post-secondary institutions and local labour talent means many ingredients are in place to take advantage of rising services trade and other knowledge-based growth. 24 Agenda • Global economic context • National economic context • Impact on Greater Vancouver • Greater Vancouver defined and compared • Scorecard results • Greater Vancouver’s traded clusters • The region’s risks and challenges 25 Greater Vancouver Map 26 Criteria for Selecting Comparator Regions • Each of the selected metro areas meet one or more of the following criteria: – A transportation hub. – One of Greater Vancouver’s Canadian competitors. – One of Greater Vancouver’s Pacific Northwest competitors. – Comparatively sized to Greater Vancouver. – Located in a rapidly emerging economy. – A popular tourist destination. 27 Benchmarking: Metro Regions Barcelona Portland Calgary Rotterdam Copenhagen San Francisco Halifax Seattle Hong Kong Seoul Houston Shanghai Los Angeles Singapore Manchester Sydney Miami Toronto Montreal Greater Vancouver 28 Agenda • Global economic context • National economic context • Impact on Greater Vancouver • Greater Vancouver defined and compared • Scorecard results • Greater Vancouver’s traded clusters • The region’s risks and challenges 29 Benchmarking: Ranking Method • This study uses a report card-style ranking of A–B–C–D (indicators are divided into quartiles) to assess performance. • Backward looking—all indicators end in 2014 or earlier. • The report features 32 indicators divided into two categories: Economy (21) and Social (11). • Economy category also includes indicators that measure transportation (ports, airports, rail and trucking) performance. • The overall ranking is an average of the Economy and Social category scores. • For more information: http://www.conferenceboard.ca/hcp/methodology.aspx 30 Vancouver Scorecard: Key Findings • The overall results of the Scorecard offers mixed news for Greater Vancouver— it finishes 9th out of 20. • Greater Vancouver does slightly better in the Social category than in the Economy category. • Within the Economy category, Greater Vancouver ranks highly among the transportation-oriented indicators. • Region still faces significant challenges that threaten its economic vitality. 31 Greater Vancouver’s Economic Performance Indicator Grade Ranking KPMG’s total tax index A 3 (12) Office rents (US$ per square foot) A 5 (17) Port cargo tonnage per $1 million of GDP B 3 (19) Labour productivity growth B 7 (20) Employment growth B 11 (20) Venture capital investment per $1 million of GDP C 4 (11) Port container traffic (TEUs) per $1 million of GDP C 5 (19) Real GDP per capita growth C 7 (20) Number of cruise vessel calls C 7 (18) After-tax income growth C 8 (19) Number of participants at international associations meetings C 8 (19) 32 Greater Vancouver’s Economic Performance continued Indicator Grade Ranking Inbound airport cargo tonnage per $1 million of GDP C 9 (20) High-tech employment share C 9 (19) Unemployment rate C 10 (20) Inbound airport seats per capita C 10 (20) Marginal effective tax rate on capital investment C 10 (17) International visitors C 11 (20) Labour productivity C 12 (20) After-tax income per capita C 13 (20) Real GDP per capita C 14 (20) Market size D 16 (20) 33 Economy Report Card “A” Metros “B” Metros “C” Metros “D” Metros 1.