More Jobs = Population Increase = Stronger Demand for Housing 

Those who are still waiting for prices to come down before buying might want to start looking now.  More jobs will equate to more demand and eventually higher prices.  Our current environment of low prices and low interest rates creates the perfect time to buy and it won’t last forever.   Let the Hiring Begin! 

Todd Hirsch – Senior Economist, ATB Financial 

Job creation in Alberta lagged behind most other provinces in the 2010 recovery period, but stronger employment growth started to pick up around the turn of the year. What are Alberta employers anticipating this spring?   According to the latest survey of employers from Manpower Canada, companies in Calgary, Edmonton and Red Deer are expected (on balance) to add to their payrolls in the second quarter of 2011.   The survey calculates the difference between the percentage of firms expecting to expand payrolls and the percentage of firms expecting to contract them. The difference for all three Alberta cities in the survey is positive.   Reversing a trend seen in previous Manpower reports, firms in Calgary are now expected to lead the province in terms of increasing employment. The balance of net employment outlook in Calgary stands at 26%, which is an improvement over earlier surveys.   Employers in Edmonton and Red Deer, which had traditionally led the gains, now trail with a net positive balance of 12% and 10%, respectively.   The Manpower survey press release notes that nationally, Canadian employers are expected to add to their payrolls (i.e., a net positive outlook), but that optimism is particularly strong in Western Canada. Activity in the energy and mining sectors are identified as the primary drivers.

Market Update – Who can predict what will happen next?  No one saw it coming, or at least we didn’t hear anyone predicting it, but major unrest suddenly hit North Africa and much of the Arab world and is causing economic ripples and uncertainty in the rest of the world.  Any time oil supplies are threatened, the world goes into turmoil.  Oil prices go up, which has a negative impact on airlines and trucking companies, to name a few, in countries that rely on imported oil.  On the other hand, countries that export oil are quite likely to see economic gains from increased oil prices. 

The news item below shows that Canada and Alberta are already doing very well relative to much of the rest of the world.  Increased demand and higher prices for oil could very quickly change the landscape in Alberta and help us see a return to the good old days when budget surpluses were the norm.  We don’t want to see the good old days as they were in 2007 but a return to balanced markets and strong employment will be welcome.  We believe that can happen in 2011. 

Canada’s Economy Comes up Roses in Q4 – Dan Sumner, Economist, ATB Financial 

If you had to live in a developed country during the 2008/2009 recession and subsequent recovery, Canada was pretty much as good as it got. And according to new numbers released this morning, the Canadian economy is continuing to surprise the markets to the upside. 

Canadian Gross Domestic Product (GDP), a measure of the overall economic output of the country, rose by an annualized rate of 3.3% in the fourth and final quarter of 2010. This reading is ahead of both market expectations (+3.0%) and what the Bank of Canada was predicting (+2.3%), and is also stronger than US economic growth over the same period (+2.8%). 

The main contributor to the strong Q4 growth was a blockbuster month for exports in December, although consumer spending and business investment were also solid. Across industries gains were widespread but the biggest gainer was the mining and oil & gas extraction sector, which bodes well for Alberta. 

With the final data point for 2010 now available, Canada’s GDP grew by 3.1% in 2010 after falling by 2.5% in 2009. This compares with 2.8% growth in all of 2010 for the US. Readings on Alberta’s provincial GDP growth are not available yet (due out in spring 2011), although considering the energy sector has seen a strong rebound, growth is looking fairly strong. 

Moving ahead the Canadian economy is likely to remain robust in 2011, although growth could cool off as we move further away from the recession. The most important factor in 2011 will be what happens in the US. If things finally start to gallop down there, it will bode really well for the great white north.