Who knew that Canadian household savings had an impact on St. Albert’s industrial square footage?
Mark Nassar, Evan Cherniawsky and Yamei Wang did. At least they recently discovered the connection while working on a class project.
All three are business students enrolled in an operations management consulting class at the University of Alberta that pairs fourth-year students with companies in need of data analysis services.
Not only do clients get professional work at minimal cost, but the students get real-life consulting experience (including a very real paycheque), said Dan Haight, course supervisor and president of Darkhorse analytics.
“Students in university are used to these prepackaged data sets and fairly well understood questions, when you enter the real world it’s never like that,” said Haight. “There are always nuances and changes that you didn’t expect. This course is a great opportunity to experience that while still in their academic career.”
In February, students chose among several projects. Nassar, Cherniawsky and Wang chose to work with St. Albert. The group is tasked with creating a forecasting model for residential and non-residential growth.
This formula will aid in future planning and marketing decisions said Rhys Chouinard, economic analyst for St. Albert, by better predicting the rate of municipal growth.
“It helps us do our jobs that much better if we understand how our community grows within a larger regional economy,” said Chouinard.
To establish the forecasting model the students examined the relationships between historical macro-economic data and recent residential and non-residential growth patterns.
“We imagined as if we were currently in 2010 and we were going to predict (the next five years),” explained Nassar.
Although “surprisingly hard,” they were able to isolate certain variables. Population, the industrial price index and whether federal coffers are in a surplus or a deficit position, for example, all influence the rate of industrial development in St. Albert. So does household net savings.
“What we think is happening here is that when savings increase that means consumption is decreasing and if less people are consuming that effects the economy,” said Nassar.
Factors influencing new housing starts were a bit more obvious: GDP, interest rate, oil price, population growth, unemployment rate, among others.
Nevertheless, the project is invaluable to the city’s economic development team.
“We get the information right away, in two or three months, and we can build that into our work plan for 2016 and start acting on the information quickly,” said Chouinard. “Whereas if we had to sit down and do the studies ourselves it could take six months to a year and then it delays all of those strategies and the evidence-based decisions we want to make.”
Nassar, Cherniawsky and Wang will present their findings to the economic development team in April. After review, the group will address council with their report.
The class has a good track record, said Haight.
One team helped Alberta Health Services develop a model to determine staffing levels in 911 calling centres when the provincial agency took over ambulance services and had to build a dispatch centre from scratch.
“From what I understand they used that for several years in planning and scaling up the capacity of their system, to great effect,” said Haight.
The city also embarked on another project with the University of Alberta’s school of retail to determine the ideal mix of retailers, optimum operating hours and future demand for downtown St. Albert. The results of this study will be handed over to the city by the end of March.