September 16, 2011 – Weekly Market Update
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.
