(The following excerpt is reprinted with permission from Troy Media)
More data is coming in that is indicating Canada’s housing market is beginning to lose at least some of its allure. Nationally, the Canada Mortgage and Housing Corporation (CMHC) reported July housing starts of 208,500 units, down from 222,100 in June. It isn’t a large drop but it’s likely the full impact of the slowing resale market has been digested.
In Alberta, housing starts dipped down to 31,500 from 33,900 in July. However, overall activity in 2012 is substantially higher than in 2011 (when housing starts totalled 22,500). Alberta’s housing activity is being driven higher due to a robust local economy and a jump in in-migration through the first half of 2012. If these trends persist, Alberta should be buffered against a sharper contraction in housing activity that may occur in other provinces, such as British Columbia and Ontario.
Nationally, the Canadian economy shed 30,400 jobs, which is far worse than the consensus expectation of economists for a gain of 8,000 jobs. It’s another sign that a troubled global economy is weighing heavily on Canada.
Alberta, however, moved in the opposite direction. The job market in this province added 5,800 new positions in July, undoing some of the 8,600 jobs that were lost in June. Over the first seven months of 2012, total employment in Alberta is higher by 3.2 per cent – solidly above the gain of 1.0 per cent for the comparable time periods in Canada overall.
Alberta’s unemployment rate is holding steady at 4.6 per cent, the lowest in the country, and well below the national rate which skipped a tenth of a point higher to 7.3 per cent.
Even better for Alberta: the added jobs are all full-time positions. In fact, a total of 15,300 full-time jobs were created, which was only partially offset with a loss of 9,600 part-time jobs. Compared to a year ago, a significant number of jobs have been created in construction (+27,700), oil and gas (+24,700) and transportation and warehousing (+11,800). The only sectors with notable job losses are information, culture and recreation (-17,400) and wholesale and retail trade (-10,300).
While Alberta is bucking the global and national trend, the economic momentum in the province has slowed going into the second half of 2012. Jobs were added in July, but the pace of new job creation has tapered off from the breakneck speed of last year. This apparent moderating of the economy is actually a good thing. An overheating economy can cause problems and imbalances – especially labour shortages and spiralling wage costs for employers.
| ATB Financial