Calgary is slowing pulling out of the recession: Hirsch
The Calgary Economic Outlook is positive as Calgarians are starting to spend money again
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Although Calgarians might not see it yet, the city and the province is crawling out of the recession, by way of public spending and a new economic direction.
Speaking at the annual Calgary Economic Outlook, Todd Hirsch, ATB Financial’s Chief Economist, said there are three prominent growth areas in Alberta right now: energy, retail and housing.
While the energy sector was responsible for a massive numbers of 2015 layoffs, energy companies are beginning to hire again – with a caveat. New jobs in the industry aren’t paying as much as they used to – average weekly earnings are down about 10 per cent in this new positions.
Hirsch said four years ago, energy was the engine driving growth in Alberta, but now it will take a backseat to new sectors.
“In 2017, and going forward, it’s changed its role to this: the backbone of the provincial economy,” he explained. “Still very important, but in a different role.”
There was a time when Calgary was seeing a steady eight per cent growth in retail sales, until it came crashing down around October 2014.
However, as of August 2017, it looks like people are spending again – retail sales have actually surpassed record highs measured in 2014.
While it’s good news, Glen Hodgson, senior fellow at the Conference Board of Canada, said it could be attributed to pent up demand from the last few years. By next year it could re-stabilize.
Hirsch added that increased spending still hasn’t pulled retailers back from the deep end – they’re still making up for years of expenses in a slower economy, and will continue to feel that stress for some time.
Before the recession, Calgary was building about 40,000 new units per year. The recession sunk those numbers to about 18,000, but in the first half of 2017, we’re up to more than 30,000 units being built.
Hirsch attributes this to people who had the funds but held off purchasing a property, as they were unsure how far the housing market might crash. Now they’re finally pulling the trigger.
The message hasn’t changed much from last year’s Outlook – Calgary needs to diversify, and the city is working hard to bring in more businesses and step away from oil. And they’re trying to make it happen fast.
Mary Moran, President & CEO of Calgary Economic Development, announced that by next spring, they will be updating Calgary’s 10-Year Economic Strategy.
“It’s been five years since it was last updated, and I’m pleased to announce almost 90 per cent of the initiatives outlined in that strategy are underway,” she said. “But we truly need a strategy that is more reflective of how Calgary can work faster and more collaboratively in order to survive and thrive in the uncertainty of the new economy.”
She hopes to one day earn Calgary the brand of most innovative city in Canada.