June 2011 Alberta Economic Fundamentals

[Ally]

Grande Cache profit up, sees higher mining input costs





Grande Cache Coal Corp. reported a nearly fourfold rise in quarterly profit helped by higher selling prices, but said an increase in mining input costs or lower-than-expected production could impact its fiscal 2012 cost of sales.




In April, the Alberta-based metallurgical coal miner had cut its 2012 coal sales forecast by about 8 per cent saying production at one of its mines was delayed.




The No. 8 pit at the Smoky River Coalfield, which went into production in the summer of 2010, has been plagued with various problems.




Read the full article here.

 

[Ally]

Trade mission to China sure to pay dividends





The recently concluded Calgary Economic Development mission to Beijing and Shanghai was the largest trade mission that Calgary has ever undertaken, with more than 70 business people from the energy, finance, professional services and tourism sectors (not to mention Big Rock, which brought lots of product and made lots of new fans).




Despite my initial reservations about economic benefits of the trip, I was very pleased to lead this delegation and help set up some major meetings.




But this is not about my travelogue (although it was pretty cool to visit one of the 10 largest companies in the world and see their lobby decorated in Canadian flags with a 17-metre sign welcoming "Mayor Nenshi and the Calgary delegation").






Read the full article here.

 

[Ally]

Calgary inner city housing market leads to sales



According to figures released today by CREBÂ (Calgary Real Estate Board), year-to-date residential sales in the inner city grew nearly 4 per cent, outperforming the city wide average.

City of Calgary residential sales totaled 1,816 in May 2011, a two per cent increase in volume over May 2010. However, slower early spring sales resulted in the overall year-to-date sales being three per cent lower than the 2010 spring market.





As the city grows, improvements in the inner city communities are consistent with changing preferences in lifestyle options.





`Consumers are looking for shorter commute times to work and easy access to a wider range of services provided by these inner city communities,` says Sano Stante, president of CREBÂ. `Many of these communities are surrounded by abundant amenities such as parks, mature trees, diverse shopping and transit which appeals to a wide range of consumers; furthermore, inner city homes can be considered a stable real estate investment, as there is significant value in land located near the city`s core.`





Read the full article here.

 

[Ally]

Edmonton housing market in one word: Up



The local real estate market is looking up according to the current statistics released by the REALTORS[sup]Â Association of Edmonton. The average residential sales price is up, the price of a single family detached home or a condo is up, number of sales is up and inventory is up over the previous month.





`Local market housing sales this year are tracking as we forecast in January,` explained REALTORSÂ[/sup] Association of Edmonton President Chris Mooney. `Historically for the month of May, the days-on-market (50 days) is at the second lowest point in four years while the sales-to-listing ratio at 53 per cent is at the second highest point in the same period. Both metrics are a good indication of market optimism.`





The average* price of a single family detached home in May was $380,545, up a quarter of a percent from last month. An average priced condo sold for $241,079, up an amazing 3.65 per cent from April. Duplex and row house prices declined 2.96 per cent month-over-month but the average residential price (including all types of residential properties) was up 1.39 per cent from a month ago.



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[Ally]

Building permits in Calgary region rise






CALGARY ` While Canada as a whole and Alberta were experiencing year-over-year declines in building permits, the Calgary census metropolitan area had a spike in April compared with April 2010.




Statistics Canada reported Monday that the value of building permits in the Calgary region increased to $375.2 million during the month, up 15.4 per cent from a year ago and up 8.6 per cent from March.




`In Calgary, the increase was largely the result of higher intentions for commercial buildings and single-family dwellings,` said the federal agency.




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[Ally]

Oil producers spy bigger role for 'conventional' crude




As triple-digit oil stokes a strong surge in energy investment, Canada`s oil industry has lifted its expectations of how much crude the country will pump in coming years.




But in a surprising development, only half of the change in forecast growth comes from the oil sands, which are expected to stick more closely to past predictions.



Read the full article here.

 

[Ally]

Edonton building permits down from last year




EDMONTON - There was good and bad news Tuesday for the Edmonton region and Alberta when Statistics Canada released its building permit figures for April.




The Edmonton census metropolitan area and the province both posted gains from the previous month, but saw year-over-year declines when it came to construction intentions ` a leading indicator for building activity.




Statistics Canada reported Monday that the value of building permits issued for the Edmonton region increased 17.1 per cent from March to April to $339.3 million.




`In Edmonton, the gain originated from higher construction intentions in the residential sector and commercial buildings,` said Statistics Canada





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[Ally]

Saudi Arabi to boost oil output





Saudi Arabia is planning to lift oil output sharply in June, whatever policy OPEC adopts this week, in an effort to rein in high fuel prices.







Riyadh expects to lift production by more than 500,000 barrels a day in June to its highest for three years, a senior Gulf industry official familiar with Saudi oil policy told Reuters.







Worried about the impact on economic growth of inflated energy costs, Saudi will act alone if necessary to keep a lid on prices now at $114 US a barrel for benchmark Brent crude.







The biggest producer in the Organization of the Petroleum Exporting Countries, Saudi wants the cartel to lift formal output limits at a meeting on Wednesday to show consumer countries that it sees the danger to the economy of runaway oil prices.





Read the full article here.

 

[Ally]

Busy year prompts 24% spike in Canadian drilling forecast




EDMONTON - Western Canada`s drilling industry has been busier than expected so far this year, prompting the Canadian Association of Oilwell Drilling Contractors (CAODC) to raise its forecast by 24 per cent for the rest of 2011.




In the first three months, rig utilization averaged 68 per cent, about 11 per cent higher than the CAODC projection released in October. The industry ran an average of 534 drilling rigs, up from the 480 that was anticipated.




The first-quarter strength in activity was based on high commodity prices, a favourable investment climate and good `geology,` CAODC said in a release Wednesday.





Read the full article here.

 

[Ally]

Edmonton housing market yet to recover from recession




CALGARY ` A new report released Tuesday by BMO Capital Markets says the national housing picture in Canada masks major underlying differences in valuations among three of the country`s four largest cities ` Vancouver, Calgary and Toronto.




The report flags the possibility of lower prices in Vancouver, steadier to softer prices in Toronto and firmer prices in Calgary in the near future.




`In addition, Canada`s real estate market is vulnerable to a correction if there is a rapid rise in interest rates due to higher inflation, an increase in unemployment because of a weak U.S. economy, or a slowing in foreign investment,` said the report.




Soaring oil prices and rapid in-migration led to a doubling in Calgary`s house prices within four years, making the city Canada`s housing hot spot five years ago, said the report authored by senior economist Sal Guatieri.





Read the full article here.

 

[Ally]

Calgary single-family sales and prices increase in May





CALGARY ` Single-family MLS sales and the average sale price rose in May compared with a year ago, according to the Calgary Real Estate Board.




In releasing its monthly data Wednesday, CREB said there were 1,313 single-family transactions for an average price of $489,482 during the month. Sales were up 4.04 per cent from the 1,262 sales in May 2010 and the average price increased by 1.29 per cent from the $483,240 a year ago.




However, the condominium market continues to be slow. In May, 503 condos sold for an average price of $287,384. Sales were down 2.9 per cent from a year ago (518) and the average price was off by 5.67 per cent from May 2010 ($304,662).






Read the full article here.

 

[Ally]

Washington environmental agency tears into Obama administration over Canadian pipeline





WASHINGTON ` The U.S. Environmental Protection Agency has expressed "significant" new fears about the safety of Calgary-based TransCanada Corp.'s proposed Keystone XL oilsands pipeline, criticizing decision makers in the Obama administration for conducting a flawed study of the project's potential impact.







In a letter to the State Department, the EPA warned officials at the State Department they must "carefully consider" the possibility of finding an alternate route for the 2,700-kilometre line that moves it away from sensitive ecosystems in the U.S. Great Plains.







Moreover, the EPA says State officials may have underestimated potential lifecycle greenhouse gas emissions of oilsands production by as much as 20 per cent.




Read the full article here.

 

[Ally]

Calgary housing market recovers more than half its losses







CALGARY ` A new report released Tuesday by BMO Capital Markets says the national housing picture in Canada masks major underlying differences in valuations among three of the country`s four largest cities ` Vancouver, Calgary and Toronto.




The report flags the possibility of lower prices in Vancouver, steadier to softer prices in Toronto and firmer prices in Calgary in the near future.




`In addition, Canada`s real estate market is vulnerable to a correction if there is a rapid rise in interest rates due to higher inflation, an increase in unemployment because of a weak U.S. economy, or a slowing in foreign investment,` said the report.






Read the full article here.

 

[Ally]

New Alberta oil wells doubled in 2010: ERCB




EDMONTON - Alberta produced 1.6 million barrels per day of bitumen and 459,000 barrels per day of conventional crude during 2010, the Energy Resources Conservation Board said in its annual report reserves released Wednesday.




The total conventional crude output for the year of 168 million barrels represented a 0.4-per-cent reduction from 2009, while the 589 million barrels of oilsands output was eight per cent above 2009`s total.




The ERCB report also shows over 2,300 successful oil wells were drilled in 2010 ` more than double the numbers drilled in 2009 ` as drillers switched from gas to oil drilling.





Read the full article here.

 

[Ally]

U.S. will work with Canada on energy





In the midst of the challenges facing the approval of TransCanada's Keystone XL pipeline, U.S. Ambassador David Jacobson touched down in Calgary this week to reiterate the message that Canada is critical to American energy security.




Of course, it's not as simple as that.




There were caveats attached to Jacobson's comments regarding the development of the oilsands and the environmental impact.




"Significant environmental challenges remain with respect to oilsands extraction, we are aware of the progress that has been made . . . but additional improvements are necessary," said Jacobson.






Read the full article here.

 

[Ally]

Alberta's average rent highest in Canada: Survey





CALGARY ` Alberta has the highest average monthly rental rate in the country and the Calgary region is among the highest in Canada of major centres, according to a survey released Thursday by Canada Mortgage and Housing Corp.




The agency in its Rental Market Survey said provincially the highest average monthly rent for a two-bedroom unit in new and existing structures in April was Alberta`s $1,029 followed by British Columbia ($1,015) and Ontario ($980). Alberta`s average was up slightly from $1,023 a year ago.






Read the full article here.

 

[Ally]

Calgary region new home prices remain flat





CALGARY ` New home prices in the Calgary census metropolitan area remained flat in April, according to Statistics Canada`s New Housing Price Index released Thursday.




The federal agency said prices in the region were the same as in March but they did dip slightly by 0.2 per cent compared with April 2010.




Across Canada, the NHPI rose by 0.3 per cent on a monthly basis and by 1.9 per cent year-over-year.




Between March and April, Toronto and Oshawa (0.6 per cent) as well as Ottawa`Gatineau (1.3 per cent) were the top contributors to the NHPI`s upward movement, said Statistics Canada.






Read the full article here.

 

[Ally]

Alberta economy gaining steam: RBC




CALGARY ` The wheels of economic growth are in motion in Alberta as the province reclaims its position as one of Canada`s fastest growing economies, says the latest Economic Outlook report released today by RBC Economics.




The report forecasts Real GDP growth of 4.3 per cent in Alberta this year which will lead the country and economic growth of 3.8 per cent in 2012, which will be behind Saskatchewan`s nation-leading 4.7 per cent.




Alberta`s economic growth this year will be its best showing since 2006 and an increase from the 3.7 per cent hike in 2010.




`Strong demand for Alberta`s bitumen continues to spur tremendous activity in the province`s various oilsands projects,` says the report. `This activity more than makes up for weakness in natural gas and declining conventional oil output. Alberta`s oil and gas extraction producers are in midst of a $24.2-billion spending binge this year, boosting their outlays by nearly 18 per cent relative to 2010, according to intentions expressed in Statistics Canada`s Private and Public Investment survey released in February.`






Read the full article here.

 

[Ally]

Calgary consumers most optimistic in country






CALGARY ` Calgary is the most optimistic market in Canada with 60 per cent of consumers stating the economy is getting better and just 17 per cent saying it is getting worse, according to the 2011 Major Market Retail Report study, conducted for the 15th year by KubasPrimedia.




The report, released Thursday, found that consumers across the country are more optimistic about the economy with 48 per cent stating the economy is getting better and only 28 per cent saying things are getting worse. `This is a stark contrast to the 2008 findings, where 44 per cent of respondents felt the economy was getting worse,` said the report.




According to a report by RBC Economics, retail sales in Alberta are forecast to grow by 6.0 per cent this year and by another 5.8 per cent in 2012 ` both years leading the nation in year-over-year growth.




Read the full article here.

 

[Ally]

Alberta apartment renters have a lot of choice at a high price




EDMONTON ` Alberta has the unlikely distinction of having Canada`s highest rental apartment vacancy rate and the most expensive average monthly rents.




The average monthly rent in Alberta for two-bedroom apartments in new and existing structures was $1,029, according to Canada Mortgage and Housing Corp.`s spring rental market survey released Thursday.




That is up slightly from $1,023 a year ago.




Alberta also had Canada`s highest vacancy rate at 4.7 per cent, down from 6.0 per cent a year ago.





Read the full article here.