“...this growth comes with the caveat that the global economy stabilizes. Otherwise, all bets are off."
Ben Brunnen, Chief Economist with the Calgary Chamber of Commerce, released an Economic Outlook that projects strong growth for Calgary but with many global risks. Brunnen’s Economic Outlook was featured at a Risk Management Association economic panel event this morning.
Despite continued global economic uncertainty, annual investment has grown in Alberta’s energy sector since 2009, suggesting companies expect oil prices to remain in a profitable range for the foreseeable future.
“Strong provincial energy industry investment combined with real GDP growth across most sectors suggests that Calgary’s economy will perform well into 2012 and 2013,” said Brunnen. “But this growth comes with the caveat that the global economy stabilizes. Otherwise, all bets are off.”
Calgary is Canada’s energy hub, whose fortunes are tied to global energy markets. Provincial energy sector investment has created favourable conditions for growth in the city.
“Calgary’s economy really turned a corner in 2010 with employment growth in most major sectors,” said Brunnen. “In 2011, the value of commercial building permits will increase for the first time since 2007, indicating a new phase of business expansion.”
The Economic Outlook predicts Alberta’s real GDP growth to be between 3.8 and 4 per cent in 2011 and slightly lower in 2012 and 2013 due to global economic concerns. For Calgary, GDP growth is forecast to be between 3 and 3.2 per cent in 2011 and between 3.1 and 3.3 per cent in 2012. Growth is expected to decline to between 2.9 and 3.1 in 2013, as conditions in the US and
global economies weaken.
Calgary’s unemployment rate is expected to close out 2011 at 5.8 per cent (down from 6.9 per cent in 2010) and continue to decline to between 5.6 to 5.8 per cent in 2012 and 5.7 to 5.9 per cent in 2013.
“Calgary experienced 11 consecutive months of total employment increases,” said Brunnen. “Though we are unlikely to return to the acute labour shortages of 2006 – 2008, a gradual tightening of Calgary’s labour market is expected.”
Key risks to the forecast include insufficient action to address the European debt crisis, a further slowdown in the US, and moderation in the Chinese economy.
“Calgary fared better than most during the Great Recession,” said Brunnen. “It continues to be one of the best places to live and do business in North America.”
You can read the full 24 page outlook here