CALGARY ECONOMY BACK ON TRACK FOR ANOTHER UPTICK
Date Posted: Thursday, February 23, 2012
Western Canada's most vibrant economy is back on a roll. A strong comeback in retail sales, greatly reduced office vacancy rates and the return of jobs, jobs, jobs have convinced the staff and board of Calgary Economic Development that one of the shortest, nastiest slumps in city history has drawn to a close. Based on a series of upbeat economic indicators, there are plenty of reasons to feel bullish about the future and reason for the robust economic forecasts included in the recent provincial budget.
To backtrack a moment, the latest mood swing in our city's typically cyclical economic pattern led to an intense and rocky ride, though mercifully brief. As we all know, the bottom fell out of world economies in the fall of 2008. And although Canadians were largely shielded from the worst effects of the global crisis, most of us took our lumps from economic headwinds.
But based on the year-end indicators that we've compiled, we're justified in looking on the bright side once again. As the numbers roll in, I've been particularly impressed by their consistently positive tone right across the board.
Based on encouraging results from 2011, it's starting to look like an even more prosperous 2012. So let's get straight to the good news, starting at street level: more than 31,000 jobs came roaring back last year, slashing the city's unemployment rate to 4.9 per cent from an almost intolerable 7.7 per cent in May 2010. Those figures are still more impressive when you factor in the addition of thousands of new workers to the labour force. In all, Calgary enjoyed a remarkable employment growth rate of 4.9 per cent, four times the national average – accounting for more than 16 per cent of all the jobs created in Canada.
Clearly, we're once again a go-to destination for Canadian jobseekers. According to last year's census, Calgary is the fastest growing metropolitan centre in the country, with Edmonton not far behind.
Retail sales, always an important indicator, have also stormed back, rebounding from negative growth in 2009 to 4.5 per cent growth last year. That's part of the reason why Calgary's economic strength is projected to place it among the top three Canadian cities this year (Saskatoon and Edmonton are the others), with expected GDP growth of 3.6 per cent.
Here's another talking point. Fears of office vacancy rates reaching 20 per cent for an extended period are now a distant memory. Even with two significant projects, the Bow and Eighth Avenue place, coming on stream, downtown office vacancies remain at a remarkably low 5.7 per cent. We'd definitely like to see to see more office space available, to accommodate larger tenants that are looking to expand.
But there's much more. In response to increasing demand, we can look forward to a spate of new development. During 2011, permits were issued for 44 major projects (i.e., $10 million or more), almost double the previous year's total. Meanwhile, the city issued $4.5 billion in building permits during the year, a figure that stands as the third highest in history. And City of Calgary industrial land sales also regained their vigour last year, reaching $71 million in 2011. That stands in dramatic contrast to 2009 when the figure was zero.
As icing on the cake, Calgary housing remains stable and inflation levels remain at historic lows, allowing local wage rates to roll along well ahead of them.
The jobs have returned and more qualified people will be soon needed, so CED's labour attraction campaign, known as Calgary. Be Part of the Energy, will continue to drive home the point. With oil prices projected to continue hovering near $100 a barrel, local engineering and construction firms are back in hiring mode.
The message is there's still a lot to like about Calgary's business environment. Just ask the Chinese, who have invested nearly $20 billion in Alberta’s energy industry since 2009. Most of us have known this for years, but we need to keep selling our strengths to the world at large.
While Calgary still relies on the energy industry as a primary source of growth, this strength has helped to diversify our economy in related industries as IT and financial services (in which employment has nearly doubled in 10 years). Construction and real estate also have helped to protect us from external headwinds, as has our strong base of corporate headquarters.
Of course, a few thorns still remain on the rose bush. Prices for North American natural gas remain at almost shockingly low levels and Alberta's producers, processors and pipeline operators are anxiously awaiting a turnaround. Based on our history, a recovery seems inevitable, given time.
All you need to do is walk a single downtown block at high noon to sense a fresh attitude, a new confidence, on the street. This city is getting back to where it needs, and expects, to be. It seems there is good reason to feel good about the future as we look to 2012 and beyond.
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ABOUT CALGARY ECONOMIC DEVELOPMENT
Calgary Economic Development is an opportunity-maker, helping to spark and fuel Calgary’s growth. Our job is to connect people with resources that can help them grow their careers or businesses, thrive in new locations or markets, and feel at home in our community. We offer a wealth of information to help everyone succeed and we tirelessly promote Calgary, in Canada and around the world. We’re exhilarated about our role in shaping and sharing Calgary’s story, and we’re proud to be part of the energy. For more information, please visit our website at www.calgaryeconomicdevelopment.com and follow us on Twitter @calgaryeconomic.
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