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Edmonton’s Economic Outlook February, 2012. John Rose Chief Economist Financial Services. Agenda. Recent developments – Slowing Growth & Rising Risks International Context Canada , Alberta, Edmonton Energy Prices Alberta Employment, Inflation,

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John rose chief economist financial services

Edmonton’s Economic Outlook

February, 2012

John Rose

Chief Economist

Financial Services


Recent developments – Slowing Growth & Rising Risks

International Context

Canada , Alberta, Edmonton

Energy Prices

Alberta Employment, Inflation,

Edmonton, Job Growth, Employment, CPI and Non-Residential Construction Costs

The outlook

Edmonton and the Region

Global environment
Global Environment

An uneven and anaemic recovery is underway

Slow growth in advanced countries solid growth in developing economies

Momentum is slowing in building in North America

Europe to experience a ‘double dip’

Europe may reduce stimulus too quickly

Global financial markets remain fragile

Greek, Irish, Portuguese and other sovereign debt issues

Unresolved US debat on deficits

Source: International Monetary Fund

Canada alberta edmonton
Canada, Alberta & Edmonton

Canadian domestic conditions remain good.

Slower US expansion will slow growth particularly in eastern Canada.

Alberta continues to outperform national average.

2011 has been a solid year for GDP & outstanding employment growth in Edmonton.

Source: IMF, Conference Board, Economic Trends and External Research

Oil prices west texas intermediate
Oil PricesWest Texas Intermediate

Source: US Energy Information Administration

Natural gas prices henry hub
Natural Gas PricesHenry Hub

Source: US Energy Information Administration

Alberta s unemployment is down
Alberta’s unemployment is down

  • Alberta’s labour market is beginning to tighten.

  • Unemployment should fall to an annual average of just below 5.0% in 2012.

  • Unemployment rates significantly below 5% will trigger wage increases and higher inflation



Source: Statistics Canada

Alberta s inflation is moving up
Alberta’s inflation is moving up

  • Inflation is now running at 2.9% - about three times the rate in 2010.

  • Key drivers have been electricity and gasoline prices.

  • Inflation should moderate in the first half of 2012. The current forecast is 2.7% for 2012

Source: Statistics Canada

Unemployment is trending down
Unemployment is Trending Down

Edmonton CMA Unemployment Rate

  • Jobs lost in 2008 & 2009 have now been recovered.

  • Edmonton’s rate of job growth higher then Alberta’s – among the fastest of any large municipality.

  • Labour force has been growing which has moderated wage pressures. This process is ending – expect labour shortages and wage pressures in 2012

Source: Statistics Canada

Consumer inflation is moving up
Consumer Inflation is Moving Up

Edmonton CMA CPI

  • Edmonton’s year over year inflation rate is now 2.9% - one of highest rates since August 2008.

  • Marked change from recent history when Edmonton was a low inflation environment.

  • Costs associated with non-residential construction costs have begun to move up

Source: Statistics Canada

Non residential construction price index
Non-residential Construction Price Index

  • NRCPI has turned around to positive territory.

  • Cost increases are still moderate but pressure on skilled trades appears to be building

  • Longer term it should average in the 5.0% range

Source: Statistics Canada

Real growth in gdp for the city of edmonton and the cma
Real Growth in GDP for the City of Edmonton and the CMA

The CMA has enjoyed a quicker recovery has manufacturing and non-residential construction activity picks up from very depressed levels.

Over the medium term the City growth rate converges with that of the region.

A somewhat younger demographic profile allows the City to grow slightly more rapidly then the region in the final years of the outlook.

Source: Economic Trends and External Research

The way we prosper
The Way We Prosper

  • The City of Edmonton is gathering ideas for its comprehensive economic development strategy, called The Way We Prosper.

  • The strategy is being prepared with collaboration from Edmonton Economic Development Corporation and in consultation with a wide range of local business leaders, educational institutions, community organizations and federal and provincial agencies engaged in economic development.

  • An online questionnaire is now available to gather the perspectives of Edmontonians. You are invited to participate by going to www.edmonton.ca/thewayweprosper

John rose chief economist financial services

John Rose

Chief Economist

Financial Services

4th Floor, Chancery Hall

Edmonton, Alberta, T5J 2C3

(780) 496-6070