2021

Quarterly Economic Report – Greater and Southeast

Prepared by 3plus Corporation January 2021

Greater Moncton and Southeast New Brunswicki Quarterly Economic Report Prepared by 3+ Corporation Q3 2020 Contents Introduction ...... 2 Key takeaways ...... 2 Population ...... 2 Labour ...... 2 Real Estate & Development ...... 2 Industry ...... 3 COVID-19 ...... 3 Population ...... 3 Current Population and Growth ...... 3 New Permanent Residents...... 5 Labour ...... 8 Unemployment Rate ...... 8 Labour Force Participation Rate ...... 8 Number of People Employed ...... 9 Hiring Demand ...... 9 Real Estate & Development ...... 10 Average Housing Costs – Home Ownership...... 10 Average Housing Costs – Rents & Vacancy Rates ...... 11 Building Permit Values – Overall ...... 12 Building Permit Values – Residential ...... 13 Building Permit Values – Non-Residential ...... 13 Housing Starts ...... 14 Industry ...... 14 Commercial Rents & Vacancy Rates ...... 14 Goods Trade – International Exports ...... 15 COVID-19 ...... 16 Business Openings and Closures ...... 16

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Endnotes ...... 17

Introduction

This report presents a snapshot of Greater Moncton and Southeast New Brunswick’s economy. Greater Moncton and Southeast New Brunswick is defined as the tri-county area containing Westmorland, Albert, and Kent Counties. The report discusses key economic indicators such as population, labour, real estate and development, and industry.

Some data is not available at the tri-county level. In these cases, CMA-level data or tri- community data is used. The Greater Moncton CMA contains Moncton, Dieppe, Riverview, Sackville, and several other smaller communities in the region. The tri-community, or Greater Moncton Area, contains only Moncton, Dieppe, and Riverview. Key takeaways

Population

Greater Moncton and Southeast New Brunswick’s population is growing steadily at around 2% per year. Immigration accounts for most of this growth, as the region has experienced more deaths than births in recent years. The 64+ age group is the fastest growing with a 45% growth rate over the past 10 years. The region’s aging demographics and low natural population growth rate accentuate the need for immigration and migration.

The number of permanent residents admitted to the region declined steeply in 2020. This is concerning as the region relies heavily on immigration.

Labour

Greater Moncton and Southeast New Brunswick’s unemployment rate typically exceeds the Canadian average. However, the region’s 2020 unemployment rate is below the Canadian average. The local and national unemployment rate climbed in 2020.

The number of job postings in the region has declined over the past 2 years. This may indicate fewer job vacancies. However, the number of people employed in the region has risen steadily which indicates the number of jobs is growing.

Real Estate & Development

Residential vacancy rates increased slightly year-over-year while rents increased nearly 8%. Residential building permit values shattered a record that was previously set in 2019. Overall building permit values also exceeded all previous years. Housing starts are also up 40% year-over-year.

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Industry

Commercial rents are currently around $25 per square foot. This represents a slight increase year-over-year. The commercial vacancy rate is currently 9.6%, which also represents a slight increase since last year. Commercial properties may have been negatively impacted by COVID-19, which forced many businesses to adopt remote working models.

In 2019, international export value decreased slightly year-over-year. The number of exporting establishments also decreased.

COVID-19

According to experimental Statistics data, a net 144 businesses have closed in the region since January. These closures may be temporary or permanent. The largest number of closures occurred in June, several months after pandemic lockdowns were imposed. Population

Current Population and Growth

Greater Moncton and Southeast New Brunswick’s population was 226,082ii in June 2020. From July 2019 to June 2020, the region’s population grew by 1.5%. By comparison, the region’s population grew 1.9% the year prior. The region’s population growth rate has trended upwards since 2010 as displayed in the graph below.

Greater Moncton and Southeast New Brunswick Population Growth Rate (2011-2020) 2.0% 1.8% 1.6% 1.4% 1.2% 1.0% 0.8% 0.6% 0.4%

PopulationGrowth Rate 0.2% 0.0% 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020

The number of individuals in Greater Moncton and Southeast New Brunswick has grown 10% in the past 10 years. Individuals who are over 64 years old are the region’s fastest-growing age demographic. The number of people over 64 grew 44.7% during the past 10 years, while the number of individuals 14 and under grew 10.1% and the number aged between 15 and 64 years grew 2.1%.

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Greater Moncton and Southeast New Brunswick Current Poulation and 10-year Total Population Growth by Age Group

250,000 50% 2020) 44.7% 45% - 200,000 40% 35% 150,000 30% 25% 100,000 20% 15% 10.1% Population(2020) 50,000 10% 10.0% 5% 2.1% 0 0%

year PopulationGrowth (2011 Total Population 15 to 64 Years 64+ Years 0 to 14 Years -

10 Population as of June 2020 Population Growth by Age Group (2011-2020)

Most of Southeast New Brunswick’s growth comes from immigration. In 2018-2019, immigration accounted for over half of the region’s total population growth while ‘natural’ population growth (births minus deaths) was negative.

In recent years, immigration growth has accelerated while ‘natural’ population growth has slowed. Net temporary migration (defined as the number of immigrants minus the number of emmigrants) has also accelerated slightly over the past few years. Immigration is becoming increasingly essential for growing the region’s population. iii

'Natural' Population Growth vs. Net Immigration and Net Temporary Immigration in Greater Moncton and Southeast New Brunswick 2,500

2,000

1,500

1,000

500

PopulationGrowth 0 2010 / 2011 / 2012 / 2013 / 2014 / 2015 / 2016 / 2017 / 2018 / 2019 / -500 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

'Natural' Growth Net Immigration Net Temporary Immigration

As shown in the graph below, interprovincial migration (migrants from other provinces) has trended upwards since 2015. However, intraprovincial migration (migrants from other areas of New Brunswick) has trended downwards. In 2019-2020, interprovincial migration accounted for 22.1% of the region’s population growth while intraprovincial migration accounted for 15.7% of growth.

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Net Interprovincial and Intraprovincial Migration to Greater Moncton and Southeast New Brunswick by Year 1200 1000 800 600 400 200 0 -200 2010 / 2011 / 2012 / 2013 / 2014 / 2015 / 2016 / 2017 / 2018 / 2019 / Net Net Migration -400 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 -600 -800 -1000

Net interprovincial migration Net intraprovincial migration

New Permanent Residents

Immigration, Refugees and Citizenship Canada (IRCC) publishes the number of new permanent residents by intended destination each quarteriv. 1,080 permanent residents were admitted to Canada with the Greater Moncton CMA as their intended destination in 2020. The number of permanent residents admitted to the region increased each year from 2017 to 2019. However, the number of admissions in 2020 was about half the number of admissions in 2019. COVID-19 may have caused this drop in admissions. The graph below shows number of permanent residents admitted to the region from 2015 to 2020.

This drop in permanent resident admissions may be particularly concerning for the Greater Moncton CMA. As mentioned above, the region relies heavily on immigration to grow its population.

Number of New Permanent Residents Admitted to the Greater Moncton CMA by Year (2015-2020) 2,500

1,915 2,000

1,440 1,500 1,390 1,080 970 1,000 845

500

Permanent Resident Admissions - 2015 2016 2017 2018 2019 2020

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The Greater Moncton CMA experienced a smaller drop in permanent resident admissions compared with the Canadian average. The Greater Moncton CMA experienced a 43.6% drop in permanent resident admissions. However, Canada experienced a 49.0% drop and Fredericton experienced a 66.2% drop.

Year-Over-Year Percent Change in Permanent Residents Admitted by CMA of Intended Destination 2019-2020 0%

-10%

-20%

-30%

-40%

-50% -43.6% -49.0% -51.4% -60%

-57.5% Percentage Percentage change admissions in -70% -66.2% Greater Moncton Canada Saint John Halifax Fredericton CMA

Education – Post-Secondary Enrolment at Public Institutions

According to the 2016 Census, 52% of Greater Moncton and Southeast New Brunswick residents have a post-secondary degree or diplomav. 24% of residents have a college or CEGEP diploma, 18% have a university degree at the bachelor level or above, 8% have an apprenticeship or trades certificate or diploma, and 2% have a university certificate below the bachelor level.

The number of domestic and international students in Greater Moncton and Southeast New Brunswick has trended downwards in recent yearsvi. However, enrolments among both groups increased slightly. Nearly 6,300 students were enrolled in public universities in the region during the 2019-2020 academic year.

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Number of Students Attending Public Universities in Greater Moncton and

Southeast New Brunswick 8,000 7,000 6,000 5,000 4,000 3,000 2,000

NumberStudents of 1,000 -

Canadian/Permanent Resident International Total

The most common fields of study among public university students in the region are social and behavioural sciences and law, business, management, and public relations, and health and related fields.

Number of Students Attending Public Universities in 2019-2020 in Greater Moncton and Southeast New Brunswick by Field of Study

Agriculture, natural resources and conservation Not applicable General science Other General arts Mathematics, computer and information sciences Visual and performing arts Humanities (excludes general arts) Architecture, engineering, and related technologies Education Physical and life sciences (excludes general science) Health and related fields Business, management and public administration Social and behavioural sciences and law

- 200 400 600 800 1,000 1,200 1,400

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Labour

Unemployment Rate

Greater Moncton and Southeast New Brunswick’s unemployment rate has exceeded the Canadian average in recent years. However, in 2020 the region’s unemployment rate was below the national average. The region’s labour market fared well compared to the rest of Canada at the beginning of the COVID-19 pandemic, which could account for the region’s comparatively strong performance in 2020.

Unemployment Rate in Greater Moncton and Southeast New Brunswick vs. Canada (2016-2020) 10% 9.5% 8.5% 8.8%

8% 7.0% 7.1% 6.8% 7.0% 6.3% 5.8% 5.7% 6%

4%

2% Unemployment Unemployment Rate

0% 2016 2017 2018 2019 2020

Greater Moncton & Southeast NB Canada

Labour Force Participation Rate

Greater Moncton and Southeast New Brunswick’s labour force participation rate was 63.5% in 2020, down slightly from 2019. The region’s labour force participation rate has declined slightly over the past five years. This may be due to the region’s aging demographics (see ‘population growth’ section).

Labour Force Participation Rate in Greater Moncton and Southeast New Brunswick (2016-2020) 65% 64.5% 63.8% 64% 63.4% 63.5% 63.5% 63% 62% 61% 60% 59% 58% 57%

56% Labour Force ParticipationRate 55% 2016 2017 2018 2019 2020

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Number of People Employed

The number of people who are employed in Greater Moncton and Southeast New Brunswick dropped slightly from 2019 to 2020. However, over the number of people employed in the region has trended upwards over the past five years.

Number of People Employed in Greater Moncton and

Southeast New Brunswick (2016-2020) x1,000 110 109.2 109 108.2 108 107.5 107 106 106 105.3

105

104 103 102 101 100 2016 2017 2018 2019 2020 Number People of Employed(thousands)

Hiring Demand

Hiring demand has trended downwards since 2018vii. The number of job postings in Greater Moncton and Southeast New Brunswick dropped 14% from 2018 to 2019, and 33% from 2019 to 2020. This may reflect weaker hiring demand in the region.

Total Annual Job Postings in Greater The graph below shows the five Moncton & Southeast New Brunswick - industries with the largest and smallest drops in 2018-2020 employment year-over-year. The accommodation and food services sector 25,000 21,376 reduced hiring by the greatest amount. COVID- 20,000 18,440 19 may have caused reduced hiring demand in this sector in 2020.

15,000 12,447

10,000

Job Postings Job 5,000

- 2018 2019 2020

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Change in Number of Job Postings by Industry in Greater Moncton & Southeast New Brunswick - five industries with highest and lowest losses from 2019 to 2020

Health Care and Social Assistance Public Administration Utilities Management of Companies and Enterprises Agriculture, Forestry, Fishing and Hunting Professional, Scientific and Technical Services Manufacturing Retail Trade Finance and Insurance Accommodation and Food Services

-800 -700 -600 -500 -400 -300 -200 -100 0 100 200 Change in Job Postings (2019-2020)

Real Estate & Development

Average Housing Costs – Home Ownership Home prices increased Canada-wide year-over-year by an average of 17.1% in December 2020. The average home price in Greater Moncton increased by 19.5% to $228,400. Housing prices across Canada surged during the COVID-19 pandemic.

Average Home Price and Year-Over-Year Change by Canadian City - December 2020

$1,000,000 $909,500 25% $900,000 22.3% $800,000 20% 19.5% 19.4% 17.1% $700,000 18.2% $600,000 $545,500 $607,280 15% $500,000 $397,378 $426,500

$400,000 11.0% 10% Year Year Increase (%) $300,000 $228,400 -

$200,000 5%

Over Average Average PRice Home $100,000 -

$- 0% Year

December 2020 Avg. Home Price Year-Over-Year Price Change (%)

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Average Housing Costs – Rents & Vacancy Rates

Average 2-bedroom residential rent increased by 9.1% in the Greater Moncton Area from 2019 to 2020. Rents have increased nearly 19% over the past 5 years. However, vacancy rates increased slightly year-over-year from 2.2% to 2.8%. Halifax’s rents and vacancy rates also increased year-over- year in 2020. Average 2-bedroom rent in Halifax rose 4.4% year-over-year while vacancy rates rose from 2.2% to 2.8%. The table below displays rents and vacancy rates in Halifax and Greater Moncton from 2016-2020.

Average Apartment Vacancy Rates and Rents (2-bedroom units) in the Greater Moncton CMA and Halifax CMA - 2016-2020 6% 5.6% $1,400 $1,255 5% $1,200 4.3% $1,000 4% $949 $800 2.8%

3% 2.6% 2.6% bedroom rent 2.2% 2.2% $600 - 1.9% 2% 1.5% $400

1.0% Average Average VacancyRate

1% $200 Average 2

0% $- 2016 2017 2018 2019 2020

Greater Moncton CMA - vacancy Halifax CMA - vacancy Greater Moncton CMA - rent Halifax CMA - rent

Average rents increased for every unit type from 2019 to 2020. 2-bedroom units had the largest relative year-over-year increase. Two-bedroom unit rent prices increased 9.1% year-over-year, while

Average Apartment Rents By Unit Type in the Greater Moncton CMA - 2019 and 2020 $1,200

$1,000

$800

$600

$400 Average Average Rent

$200

$- Bachelor 1-Bedroom 2-Bedroom 3+ Bedroom Overall

2019 2020

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bachelor apartment rents increased 9.8%, 1-bedroom rents increased 5.7%, and 3+-bedroom apartment rents increased 8.5%. Overall rents increased 7.8% year-over-year.

Building Permit Values – Overall

Building permit values in the Greater Moncton CMA reached record levels in 2020. Permit values exceeded $421 million. This represents a 3.6% increase from 2019, which was also a record- setting year.

Greater Moncton CMA Total Building Permit Values by Year ($ thousands) $450,000

$400,000

$350,000

$300,000

$250,000

$200,000

$150,000

$100,000

$50,000 Building Permit Values thousands) ($ $- 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

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Building Permit Values – Residential Residential building permits drove the year-over-year increase in building permit values. 2020 residential building permit values broke a record that was set in 2019. Residential permit values grew nearly 47% from 2019 to 2020.

Greater Moncton CMA Residential Building Permit Values by Year ($ thousdands) $300,000

$250,000

$200,000

$150,000

$100,000

$50,000

$- Building Permit Values thousands) ($ 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Building Permit Values – Non-Residential

Non-residential building permit values declined nearly 35% year-over-year in 2020.

Greater Moncton CMA Non-Residential Building Permit Values by Year ($ thousands) $300,000

$250,000

$200,000

$150,000

$100,000

$50,000

Building permit values ($ thousands) $- 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

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Housing Starts

Housing starts in the Greater Moncton CMA are up nearly 40% in 2020 compared with the previous yearviii. The region experienced 20,700 housing starts in 2020. According to Statistics Canada’s data, which goes back to 2006, this is the highest number of annual housing starts in the region.

Annual Greater Moncton Housing Starts x1,000 (2011-2020) 25.0 20.7 20.0

15.6 14.8 15.0 13.8

10.9 10.2 10.6 10.0 8.5 7.5 7.6

5.0 HousingStarts (thousands)

0.0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Industry

Commercial Rents & Vacancy Rates

Overall commercial vacancy in the Greater Moncton Area is 9.6% and average asking rent is $25.21 per square footix. Commercial vacancy rates and average asking rents have trended upwards since mid-2019.

Greater Moncton Area Commercial Rents and Vacancy Rates: 2017-2020 16% $25 14% $25 $25 12%

$25 all all classes 10% $25 - 8% $24 6% $24 $24 4%

Overall Overall VacancyRate $24 2% $24 0% $23 Average Rent (psf) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019 2019 2019 2020 2020 2020 2020

Overall Vacancy Avg. Asking Rent

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Goods Trade – International Exports

Businesses in the Greater Moncton CMA exported $351 million in goods in 2019x. In total, 130 businesses in the Greater Moncton CMA are exporters. The number of exporting establishments and the total value of goods exports decreased from 2018-2019.

Export Value and Number of Exporting Establishments in the Greater Moncton CMA - 2010-2019 145 $440,000 $420,000 140 $400,000 135 $380,000 130 $360,000 125 $340,000

120 $320,000 ExportValue thousands) ($ 115 $300,000 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

NumberExporting of Establishments Number of exporting establishments Export Value

Manufacturing goods account for over two-thirds of the Greater Moncton Area’s export value. Wholesale trade accounts for 13% of export value, while management of companies and enterprises accounts for 11%.

2019 Exports by Industry - Greater Moncton CMA 6,767, 2% 3,316, 1% 16,488, 5% 37,822, 11%

42,307, 13%

68%

Manufacturing Wholesale trade Management of companies and enterprises Transportation and warehousing Mining, quarrying, and oil and gas extraction Other

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COVID-19

Business Openings and Closures

Statistics Canada publishes experimental estimates for the number of business openings and closures by CMAxi. The table below displays the net number of business openings (openings minus closures) by month for 2019 and 2020. As of October 2020, a net 144 businesses had closed year-to- date.xii. April was the worst month with 282 closures. However, a net 155 businesses has opened since then.

COVID-19 measures reduced tourism and mandated temporary business closures and physical distancing. Loss of revenue from these events likely forced some businesses to close.

Net Business Openings/Closures (openings - closures) in the Greater Moncton CMA

100 57 44 43 26 50 12 24 0 -7 -50 -33 -39 -100 -150 -200

Openings closures minus -250

-300 -282 January February March April 2020 May 2020 June 2020 July 2020 August September October 2020 2020 2020 2020 2020 2020

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Endnotes i Greater Moncton & Southeast New Brunswick a.k.a. the ‘Moncton – Richibucto Economic Region’ a.k.a. ‘Southeast New Brunswick’ refers to the area encompassing Westmorland, Albert, and Kent Counties. ii Statistics Canada. Table 17-10-0137-01 Population estimates, July 1, by economic region, 2016 boundaries iii Net immigration refers to total immigrants minus total emmigrants iv IRCC ‘Canada – Admissions of Permanent Residents by Province/Territory and Census Metropolitan Area (CMA) of Intended Destination’ v Statistics Canada. 2017. Moncton--Richibucto [Economic region], New Brunswick and Moncton [Census metropolitan area], New Brunswick (table). Census Profile. 2016 Census. Statistics Canada Catalogue no. 98-316- X2016001. Ottawa. Released November 29, 2017. vi Maritime Provinces Higher Education Commission vii Vicinity Jobs viii Statistics Canada. Table 34-10-0156-01 Canada Mortgage and Housing Corporation, housing starts in all centres 10,000 and over, Canada, provinces, and census metropolitan areas, seasonally adjusted at annual rates, monthly (x 1,000) ix Cushman Wakefield Atlantic x Statistics Canada. Table 12-10-0138-01 Trade in goods by exporter characteristics, by industry of establishment and census metropolitan area (x 1,000). xi Statistics Canada. Table 33-10-0270-01 Experimental estimates for business openings and closures for Canada, provinces and territories, census metropolitan areas, seasonally adjusted xii Business closures refer to the number of businesses that previously had a positive number of employees, and now have zero employees.

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