There Is Good News in Alberta – people are moving here in numbers not seen since 2006 and the reasons are pointed out below.  Low unemployment, higher wages, and relatively affordable house prices are all strong motivators to entice people to move here.

Population growth is a huge contributing factor to economic stability in Alberta.  It creates jobs and supports the housing industry.  It provides workers to replace the huge number of baby boomers getting set to retire in the next few years and since most of those moving here are young, it creates new households and natural growth through childbirth.   We welcome all those who are considering making Alberta home.

Canadians Still Looking Towards Alberta – Dan Sumner, Economist, ATB Financial

With talk of labour shortages returning to Alberta, population growth and migration are important variables for the provincial economy. And according to second quarter 2011 figures, Alberta continues to gain citizens from other Canadian provinces.

A total of 4,720 Canadians relocated to Alberta during the second quarter of 2011, largely unchanged from the 5,275 that moved here during Q1. Alberta is on pace for roughly +20,000 net-interprovincial migrants in 2011, which if achieved will be the highest annual pace for net interprovincial migration since 2006.

During Q2 Alberta continued to have the largest net migration gain from Ontario, while losing the largest number of net migrants to Saskatchewan. Alberta was by far the largest benefactor of net-interprovincial migration in Canada in Q2, with the province in second place (Saskatchewan) gaining only 1,239 net migrants.

Interprovincial migration can be a difficult variable to predict; however, with the unemployment rate lower in Alberta, wages higher, housing prices relatively affordable and the provincial economy expected to grow among the fastest in the country, it’s hard to imagine that more Canadians won’t be calling Alberta home over the near future.

While more skilled workers is essential for the continued development of Alberta’s economy, it also puts pressure on social and institutional resources. As a former premier of this province once stated, “when people move to Alberta, they don’t bring their schools and hospitals with them.”

 A stable housing market requires a stable job market and it appears Alberta is improving in that category.  Jobs bring people to Alberta which creates demand for new construction, which in turn creates more jobs.  People who are confident in continued employment are much more likely to make large buying decisions (like homes). 

Long-Term Unemployment Picture Improves – Dan Sumner – Economist, ATB Financial

Alberta’s labour market has made huge job gains so far in 2011, adding just over 55,000 jobs since January. But even more encouraging is that long-term unemployment, which remained stubbornly high after the recession, has started to come down.

The average duration of unemployment in the province was 14.6 weeks as of August, while in July it was only 12.3 weeks. This marks the first time since the spike in the average length of unemployment occurred during the downturn that the indicator has been below 15 weeks for two consecutive months.

Nationally, the duration of unemployment was 18.8 weeks as of August. The average length of unemployment also increased in Canada during the recession, but unlike Alberta there has not been much in the way of improvement this year (see graph).

Long-term unemployment is much more serious than short-term, as being unemployed for a long time can lead to a self-reinforcing cycle of unemployment. This can then lead to skills atrophy and longer-term social problems such as health issues and homelessness.

One main reason behind the drop in the average length of unemployment in Alberta is that youth employment has finally started to make some gains in 2011. Employment among individuals aged 15-19 reached a two year high in August (seasonally adjusted) while employment among individuals aged 20-24 has increased by 10,000 this year.

Also, employment in regions of the province which were slower to recover after the downturn (such as Grand Prairie) picked up recently. The fact the employment gains are trickling down to these segments of the labour market speaks to the broad improvement the Alberta economy has experienced recently.

Great News from Alberta Treasury Branches

 Jobs Train Keeps on Rolling – by Todd Hirsch, Senior Economist – Alberta Treasury Branch

 It may have been at a more modest pace than what we saw earlier this summer, but Alberta wrapped up a stellar season of job growth with more people working in August.

According to Statistics Canada’s latest employment survey, 6,600 new jobs were created in Alberta last month. That caps off the fourth consecutive month of job gains, and brings the 12- month increase to 86,000 new jobs (+4.2%).

Due to an even sharper increase in the number of people entering the labour market, Alberta’s unemployment rate moved up slightly to 5.6%. Nationally, there was a net loss of 5,500 jobs, and the unemployment rate rose to 7.3%.

Given the global economic slowdown currently gripping much of the developed world, Alberta’s job market continues to defy gravity. Of the 86,000 jobs created in the last year, virtually all of them have been full-time positions.

High oil prices have been credited with boosting Alberta’s economy this year, yet ironically, jobs in the energy and resources sector slipped the most in August (-12,200). There were also fewer positions in educational services (-4,800). These were more than offset by increases in manufacturing, and throughout the services sector.

Even if employers take a bit of a breather in the fall, Alberta remains the most active job market in Canada. That should support other important economic industries such as retail sales, and it will also probably lead to higher inter-provincial migration activity as job seekers from other parts of the country turn their attention westward.

The housing market may already be seeing some welcomed relief as increased employment and consumer confidence among Albertans will help drive new housing starts.

Residential Construction in an Upswing?

In contrast to other sectors of the provincial economy Alberta’s residential construction sector has not had a great showing in 2011. However, recent data from Statistics Canada and the Canada Mortgage and Housing Corporation (CMHC) shows that the industry may be picking up. Actual housing starts surged in August to 27,400 seasonally adjusted, annualized units—the fastest pace for starts since March of last year. But the good news doesn’t end there. Residential building permits—which provide insight into the future direction of housing starts—surged to $641.6 million in July, their highest monthly amount since February 2010! Non-residential construction permits, which have fared better since the recession than residential, also rose in July, up 7.9% from June.

Since the recession, activity in the provincial construction sector has been slow to rebound. One of the main culprits behind this is an oversupply of multi-family dwellings (mainly condominiums), which has kept overall residential construction activity subdued. Although reading too much into one or two months of data can be deceiving, the surge in both starts and permits over the summer is probably a sign that some of the strength observed in other sectors of the economy (e.g. the energy sector) is starting to have feed-through effects on other sectors like residential construction.

A fragile world economy isn’t having a big an effect in central Alberta yet.  Our market cautiously continues in positive territory with year to date sales ahead of 2010.  Central Alberta Realtor’s Association statistics show year to date sales across the region up 18.1% over the same period last year and every local market we track is up except Sylvan Lake which is down very slightly (3.8%).

There is no question that shale oil activity along the eastern slopes of the Rocky Mountains and development in the oil sands are the two driving factors.  It appears that the US government is close to approving a pipeline to move large amounts of oil from Ft. McMurray to Texas.  Increased activity in the oil sands is also helping our natural gas industry because separating the oil from the sand requires large amounts of natural gas.

The other direct benefit of the shaky world economic situation to our housing market is low interest rates.  Low rates will stay around as long as the economic growth of our trading partners is slow.  It is difficult for the Bank of Canada to raise our rates when other countries are forced to keep theirs low to stimulate economic growth.  Raising our interest rates would increase the value of the Canadian dollar which is already trading higher against the US dollar than it should be to keep our exports affordable.

It is a great time to buy a home.  The overall market still favours buyers in many ways – there are lots of homes to choose from, prices are still low compared to the 2006 and 2007 boom market and record low interest rates continue to make home ownership affordable.

Red Deer – year to date sales are up 13.1% over the same period in 2010 – demand is up.  The number of active listings at the beginning of September are down 20% this year compared to last – supply is down.  The sales to listing ratio in August was 22%, almost in the 25 – 30% range that represents a balanced market – the market balance slightly favours buyers.

Lacombe – year to date sales are up 8.2% compared to last year – demand is up.  The number of active listings at the beginning of September is just slightly higher than last September – supply is equal.  The sales to listings ratio in August of this year was 18.5%, up slightly from July – the market favours buyers.

Ponoka – year to date sales are still up 24% over the same period in 2010 – demand is up.  Active listings are 19% higher than Sept., 2010 – supply is up.  The sales to listings ratio in August was 13.5%, a 2% improvement over July – the market still favours buyers.

Sylvan Lake – year to date sales are down 3.8% over the same period in 2010 – demand is down slightly.  Active listings in September  were the same as September, 2010 – supply is even.  The sales to listings ratio in August was 8% – the market heavily favours buyers.

Blackfalds – year to date sales are up 25.5% compared to the same period in 2010 – demand is up.  Active listings on Aug. 1 were equal compared to September 2010 – supply is equal.  The sales to listings ratio in August was 19.3% compared to 13.6% in July of this year – the market still favours buyers but is showing strong gains back to balance.

The relationship between supply and demand in the acreage market continues to heavily favour buyers, but August sales activity was promising with 10 acreage sales in central Alberta over $500,000.