alberta s economic prospects and regional impacts n.
Download
Skip this Video
Loading SlideShow in 5 Seconds..
Alberta’s Economic Prospects and Regional Impacts PowerPoint Presentation
Download Presentation
Alberta’s Economic Prospects and Regional Impacts

Loading in 2 Seconds...

play fullscreen
1 / 37

Alberta’s Economic Prospects and Regional Impacts - PowerPoint PPT Presentation


  • 104 Views
  • Uploaded on

Alberta’s Economic Prospects and Regional Impacts. Presentation to CAEP REDA March 3, 2011. Alberta’s Economic Prospects and Regional Impacts. CAEP Presentation March 3, 2011. Is World Economy’s Recovery Sustainable?.

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'Alberta’s Economic Prospects and Regional Impacts' - matt


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
alberta s economic prospects and regional impacts

Alberta’s EconomicProspects and Regional Impacts

Presentation to CAEP REDA

March 3, 2011

is world economy s recovery sustainable
Is World Economy’s Recovery Sustainable?
  • Uneven global recovery, with widespread financial and fiscal turbulence
  • Weak recovery in Europe: ongoing financial risks due to Greek and Irish crises; German economy doing very well
  • Modest recovery in North America; new round of quantitative easing in US improves US outlook
  • Sharp recovery in emerging markets, led by China, India and Brazil (but some risk for China)
  • Very high government debt: Japan, Ireland, Italy, US, UK
  • Removal of fiscal and monetary stimulus needs to be done carefully
  • Very weak labour and housing markets in US
  • Political instability in Middle East may disrupt oil supplies
canada in better shape than us
Canada in Better Shape than US?
  • Canada’s recovery is built on strength of domestic economy, but stronger revival in US employment is key to maintaining momentum in 2011
  • Economic growth was weaker than expected in Q3, but rebounded in Q4 ’10
  • Budding core inflation, higher energy prices and rising sales taxes have prompted BoC to start lifting rates
  • High commodity prices will keep Loonie strong
  • Real GDP growth of 3.1% in ’10; 2.7% in ’11 as domestic economy and government spending cools
alberta on the rebound
Alberta on the Rebound
  • Alberta is now out of recession: high energy prices; global recovery; surging oil investment
  • Alberta’s GDP fell by 4.5% in 2009: falling investment and exports; large 20%+ declines for manufacturing, agriculture, construction
  • Strong employment gains in 2nd half ’10 and Jan ’11
  • Budget: Alberta GDP up 3.5% in ’10 (consensus +3.2%)
  • Until 2008 the economy was growing at rates well beyond its capacity
  • Recent slowdown has eased pressures on housing and infrastructure and reduced inflation
current alberta indicators
Current Alberta Indicators
  • Building permits up 2.1% in ’10
  • Housing starts up 36% in ’10
  • MLS sales down 14%
  • Retail sales up 5.5%; car sales up 9.3%
  • Oil production up 6.5%; gas production down 5.5%
  • Employment down 0.4%
  • Manufacturing sales up 10.9%
  • Farm cash receipts down 5.9%
  • Exports up 11.3% (high oil prices)
real gdp growth alberta vs world canada and u s
Real GDP GrowthAlberta vs. World, Canada and U.S.

Sources: Statistics Canada, Bureau of Economic Analysis (historical); average of recent forecasts by Conference Board of Canada, and major Canadian banks; EIU (World)

unemployment rate alberta economic regions january 2011
Unemployment RateAlberta Economic Regions(January 2011)

Wood Buffalo – Cold Lake 4.5%

Athabasca-Grande Prairie 6.1%

Edmonton Region 5.7%

Red Deer Region 5.2%

Banff-Jasper Rocky Mtn. House 5.9%

Calgary Region 5.9%

Camrose-Drumheller5.0%

Lethbridge-Medicine Hat 4.3%

Provincial Rate 5.6%

Note: regional and provincial rates are 3-month averages

Source: Statistics Canada, Labour Force Survey

Source: Statistics Canada, Labour Force Survey

slide9

Industry Sector Prospects

  • Rising value of the Canadian dollar may limit export growth to the US, but US outlook has improved
  • Oil prices are relatively higher than natural gas prices; long-run oil prices driven by growth in China and India
  • US shale gas means gas prices will stay low, but domestic demand for gas is on the rise (oilsands/power)
  • High oil prices should stimulate investment in 2011
  • Agriculture prices have rebounded: growing demand in Asia and biofuels; COOL impacting livestock/meat
  • Forestry prices are recovering, except for OSB prices
slide10

Data and Analysis for Central Alberta Region(New REIR reports on http://www.albertacanada.com/about-alberta/regional-economic-indicators.html)

slide11

Differences in Geography

CAEP vs Central Region

  • Part of Central Region;non-member CAEP:Acme; Botha;Cremona; Delia;
  • Linden; Morrin; Munson; Starland County; Ponoka County
  • Member of CAEP; not part of Central Region:
  • Castor; Halkirk; Paintearth
population estimates
Population Estimates

Source: Statistics Canada

population estimates1
Population Estimates

Source: Statistics Canada

age pyramid
Age Pyramid
  • 20-40 year-olds have smaller share in CA than in AB
  • 0-20 have larger share
  • 44+ identical shares

Source: Statistics Canada

regional labour force
Regional Labour Force
  • In 2009, regional labour force and employment continued to increase, but likely declined in 2010
  • Unemployment rate: 6.7% in ’09 - up from 3.8% in ’08; declined in 2010
  • Participation Rate: 72.7% (labour force/population 15+)
  • Largest sectors in ’09: Retail/Construction (about 20,000 each); Healthcare/Oil and Gas (15,000 to 20,000)
  • Sectors with >10,000: Agriculture; Manufacturing; Other Services; Education
  • 4,800 workers received EI in ’09 (up from 1,500 in ’08)
  • EI down 42% Q4 ’09 to Q4 ’10; AB down 31%
regional agriculture
Regional Agriculture
  • Number of farms: 10,477; 21.2% of AB
  • Farm cash receipts: $1.75 billion; 17.7% of AB
  • Land in crops: 3.8 million acres; 15.8% of AB
  • Canola: 631,000 acres; 15.5% of AB
  • Barley: 879,000 acres; 21.5% of AB
  • Wheat (incl. durum): 824,000 acres; 12.7% of AB
  • Value of livestock: $970 million;19.4% of AB
  • Cattle and calves: 1.21 million; 19.0% of AB
  • Hogs: 599,000; 29.2% of AB
slide21

Beef Industry Consolidating

  • Herd reduction: US 3.9% down between ’07 and ’11
  • Canada and Alberta down 17% between ’05 and ’11

Source: Statistics Canada

slide22

Pork in Precarious State

  • Shrinking herd - Losses ongoing
  • Smaller industry likely - Exchange rate key

Source: Statistics Canada

regional agriculture1
Regional Agriculture

Sources: Statistics Canada and AAFRD

regional manufacturing
Regional Manufacturing
  • Estimates for Census Division 8 (2/3 of CA population)
  • In 2008, manufacturing shipments $7.5 billion, up 5.4% from ’07
  • CD 8 accounts for 10.6% of Alberta manufacturing
  • Employment 6,500: 4.5% of Alberta manufacturing jobs
  • Largest sector: chemicals ($5.6 billion or >50% of AB)
  • #2 sector: food ($630 million or 6% of AB)
  • #3 sector: O&G machinery ($300+ million or 5% of AB)

Sources: Statistics Canada

regional energy
Regional Energy
  • Gas production: 30.8 billion m3 in ’09, down 5.6% from ’08
  • Oil production: 3.2 million m3 in ’09, down 5.3% from ’08
regional energy1
Regional Energy
  • 1,189 wells spudded in ’09; down 52% from ’08
  • 16.4% of # of Alberta spuds
slide28

US Shale Gas Cause of Weak Gas Prices

Source: U.S. Energy Information Administration

number of businesses by employee size
Number of Businesses by Employee Size

Source: Statistics Canada’s Business Register

number of businesses by industry
Number of Businesses by Industry

PSTS: Professional, Scientific and Technical Services

FIRE: Finance, Insurance and Real Estate

Source: Statistics Canada’s Business Register

accommodation sector
Accommodation Sector
  • Region had 84 accommodation properties with 4,500 rooms
  • Average occupancy rate in the region was 47%
  • Average room rate was $90
personal income
Personal Income

Source: Alberta Finance & Enterprise

  • Average individual income: $34,500 in ’07; #6 of 14 regions
  • Income grew 42% ’03 – ’07; #5 of 14
slide33

Consumer Prices

  • Regional price levels are lower than the Edmonton benchmark level
  • Shelter costs are also lower than in Edmonton
investment
Investment
  • CA housing starts: 1,076 in ’10 up from 1,055 in ’09
  • Housing units: 1,594 in ’09; down 36% from ’08

Source: Statistics Canada and CMHC

building permits
Building Permits
  • Building Permits: $442 million in ’09; down 45%
conclusions
Conclusions
  • World economy has emerged from recession
  • Outlook is for slightly weaker growth in ’11 – many risks
  • US economy needs to gradually unwind stimulus
  • Alberta expected to see return to strong growth over medium term
  • Oil prices at high levels, but gas prices are weak
  • Rising US shale gas production is a threat
  • Forestry prices are improving; strong agricultural prices
  • Livestock inventories continue to decline (COOL)
  • May need to look at other foreign markets for forest and agricultural products, e.g. Asia
  • Weak US $ is a threat