Calgary’s economy, strong and getting stronger, is expected to remain so throughout 2013. The employment growth is steadily moving forward, and the city is seeing an increased demand for commercial office property in the downtown core. All of this was highlighted by a report put out recently by the Calgary Chamber of Commerce. Called the 2013 Economic Outlook, this missive also noted that retail sales growth, construction starts and income growth were all on the rise.
Calgary is seeing its population increasing at a five year high, which trickles down into the need for more housing, goods and services. That means the residential construction market will have plenty to keep them busy, along with those builders adding office space. Confidence in both construction sectors is high.
Looking at the economies of Calgary and Alberta as a whole, both have grown faster than what was predicted for the last two years. This spurred a forecast for economic growth for Alberta at 3.8 percent for 2013, up from the 3.5 percent previously predicted.
The Chamber did note that the slowdown in the global economy was having an effect on the energy industry in Alberta. Industry revenues for the current year have been decreased. June saw revenues of $124 billion, while October is expected to top out at $105 billion. Investment in the industry for that time period is expected to decrease by nearly $1 billion.
Despite the global situation, almost as bad economically as seen in 2008, Chamber executives noted that Alberta and Calgary will be the economic powerhouse in Canada. The economic environment will be riskier, so those firms that are more resilient will outperform those that don’t allow for fluctuation in fortunes from one month to the next. Businesses are advised to be cautious with their expansion plans, diversify providers for their low-cost credit needs and to offer both flexibility and a customized line up of products.
The Chamber’s report did note that some in the energy industry are being more cautious and scaling back expansion plans for 2013 as they take a wait and see attitude on the global flux. This could result in 2013 seeing a slightly slower economic bent that predicted.
Items being looked at by Canada’s industrial sector include the results of the elections in the United States, the economic picture in the Eurozone and the Chinese GDP, which appears to be declining. Also of concern is a perceived “fiscal cliff” expected in the United States in January, the result of a piece of legislation passed in Congress. That same Congress has the ability to revert that legislation, but until the election nothing will get done in Washington D.C.
On the domestic front, Canada’s biggest problem is the debt load. Mortgage delinquencies in Alberta are almost twice the national average. The tackling of the very real domestic debt problems, and the political and economic outcomes globally will have a very real effect on 2013 and beyond.