June 2011 Alberta Economic Fundamentals

[Ally]

Alberta's job growth fastest in Canada




EDMONTON - Employment figures released Friday suggest what some Alberta employers already know ` it`s getting tougher to find workers.




Alberta`s robust labour market recovery continued last month as 8,500 new jobs emerged from April to May.




The increased employment and a smaller labour force pushed down the provincial jobless rate by 0.5 percentage points to 5.4 per cent, according to Statistics Canada.




A year ago, Alberta`s unemployment rate was 6.7 per cent.





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[Ally]

Economic road map designed to keep Edmonton from becoming detroit





EDMONTON - A new economic road map for the Edmonton region will help the area avoid the wrong turns that drove Detroit`s economy from 1970s Motor City superpower to financial ruin, delegates with the Capital Region Board heard Thursday.




The chairman of the committee that developed the 300-page document released Thursday said bad decisions contributed to Detroit`s current economic woes. The city went from one of the most important manufacturing centres in the world to the municipality it is today, `run down, hollowed out, fighting for its life,` Jackson von der Ohe told civic politicians from 24 Edmonton-area communities at a Capital Region Board meeting.




The average sale price of a house in the debt-ridden American city is now $13,000, von der Ohe said.




Read the full article here.

 

[Ally]

Calgary's May building permits up 14% from last year





CALGARY ` The estimated construction value of building permit applications for May was up by 14 per cent compared with a year ago in Calgary.




The City of Calgary reported Friday that permit applications reached $274 million for the month, up from $241 million in May 2010.




But the total declined by 47 per cent compared to the five-year average of $520 million and was down 30 per cent from the 10-year average of $391 million for the month.




In May, there was $186 million in residential activity compared with $88 million in the non-residential category. Compared to May 2010 residential values are up 18 per cent from $158 million and non-residential values are up six per cent from $83 million.




Read the full article here.

 

[Ally]

'Severe worker shortages'





CALGARY ` A perfect demographic storm is developing in Alberta leading to severe worker shortages for many years to come.




Thomas Lukaszuk, Alberta`s Minister of Employment and Immigration, said the province is already starting to see labour shortages in some sectors such as the transportation and hospitality industries.




`There are companies that simply can`t find workers already,` he said. `There are sectors that are already showing inability to readily find employees at competitive price. And that will only escalate as time goes on.




Read the full article here.

 

[Ally]

Alberta recreational properties see price decline





CALGARY ` The stage is set for one of the best recreational property markets in years, says real estate firm RE/MAX in its latest report released Monday.




Greater affordability, increased selection and pent-up demand are key factors this year, according to the 2011 RE/MAX Recreational Property Report, which examined sales and trends in 46 markets across the country.




Price reductions are luring potential buyers back into the market, it said.




Elton Ash, regional executive vice-president of RE/MAX of Western Canada, said prices are down much as 20 per cent from peak levels reported in 2006-2007, bringing ownership within reach to many potential purchasers.






Read the full article here.

 

[Ally]

CMHC rental numbers





The Canadian Mortgage and Housing Corporation says that according to their numbers, renters in Fort McMurray pay around double the amount per month as renters in other cities in Alberta.







The average cost of a two-bedroom apartment in our city is around $2152/month, whereas a two-bedroom apartment in Calgary is $1040.







A three-bedroom rental in Fort McMurray is around $2357/month, while families in Calgary play around $1056 and compared to Red Deer the difference is even more drastic at $912/month.







Read the full article here.

 

[Ally]

BRIK will be a job builder, Alberta government says




EDMONTON ` Alberta`s signing of its first long-term bitumen refining contract in February could pave the way for more deals, as the province begins to collect its royalties in the actual tarry output from oilsands projects instead of cash.




At least that was Energy Minister Ron Liepert`s view, when he said `I`m optimistic as we move forward it will bring other opportunities down the road` to ensure at least 60 per cent of the oilsands output creates jobs and value-added products in Alberta.




While there has been criticism that the province is dabbling in the free market through its bitumen royalty in kind (BRIK) program, Liepert defended the move and challenged the perception of market intervention.





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[Ally]

Risks emerge for oilsands growth plans




CALGARY ` Oilsands players warned at an industry conference Monday that higher costs and pipeline constraints could derail longer-term expansion plans.




Cenovus Energy Inc. of Calgary plans to grow to half a million barrels per day of oil production by 2021, up from 137,000 bpd in first quarter 2011, but the latter part of that plan could be reconsidered if the Keystone XL pipeline is not approved, said chief operating officer John Brannan.




`Overall, for industry, I think (XL) is important and if it doesn`t go then obviously economics we put together for these growth plans, there will be wider differentials, we will have to work harder on an integrated solution,` he said at an industry conference sponsored by the Canadian Association of Petroleum Producers.





Read the full article here.

 

[Ally]

Natural gas - Opening the taps...and the drain






Last week we decided to risk ridicule by challenging the pervasively negative sentiment about North American natural gas prices (see June 6th, 2011 post).






Despite the fact that our continent is pressurized with thousands of trillions of cubic feet of surplus gas reserves, we showed that at least one leading indicator of US production ` the number of rigs drilling for natural gas in shale plays ` has been overstating productivity. As such, we argued that we could soon start seeing a reversal of the supply volumes, leading to a contrarian view that sustainably higher prices are inevitable.






Actually, all we showed last week was that the collective production growth from the most prolific, `Big Seven` US shale gas plays ` the Barnett, Haynesville, Marcellus, Eagle Ford, Granite Wash, Woodford and Fayetteville ` will decelerate over time. That was an important conclusion, but our analysis had been incomplete, because it didn`t span the full context of total US natural gas production, as opposed to just the shale gas fraction. So, this week we want to take the argument further by looking at all US sources of gas supply.





Read the full article here.

 

[Ally]

Alberta recreational properties see price decline





CALGARY ` The stage is set for one of the best recreational property markets in years, says real estate firm RE/MAX in its latest report released Monday.




Greater affordability, increased selection and pent-up demand are key factors this year, according to the 2011 RE/MAX Recreational Property Report, which examined sales and trends in 46 markets across the country.




Price reductions are luring potential buyers back into the market, it said.




Elton Ash, regional executive vice-president of RE/MAX of Western Canada, said prices are down much as 20 per cent from peak levels reported in 2006-2007, bringing ownership within reach to many potential purchasers.




Read the full article here.

 

[Ally]

International luxury brand expands to Calgary





CALGARY ` International luxury realty brand Sotheby`s has opened an office in Calgary ` its first in Alberta ` to take advantage of the growing demand for high-end homes, the Herald has learned.




Sotheby`s International Realty Canada is already established in Canada`s major metropolitan markets and resorts in British Columbia, Ontario, and Quebec.




Ross McCredie, founder/president/chief executive for Sotheby`s International Realty Canada, said the company has been watching the Calgary market for some time.




`We`ve literally been having calls or emails two or three times a week asking us when we`re coming there,` he said.






Read the full article here.

 

[Ally]

Oilsands generates thousands of jobs, billions of dollars in taxes across the country






EDMONTON - When the Canadian Energy Research Institute (CERI) released its sixth-annual oilsands update in May, it highlighted the bright investment future of the industry.




The University of Calgary energy economics think-tank expects $2.1 trillion to be pumped into 47 new projects between 2010 and 2035.




That`s split into $253 billion for initial capital for construction and, over the longer term, $1.8 trillion for operation, maintenance and sustaining capital.




But the real story is the benefits such massive investment will splash all across North America ` 900,000 full-time and part-time jobs; $444 billion in taxes paid to all levels of government; and a cumulative total of more than $623 billion in royalties bulging Alberta government coffers.




Industrialized provinces and states pull in the first round of paycheques during construction of these projects, while Alberta reaps the lion`s share of long-term jobs and investment in the decades they`ll be operating.





Read the full article here.

 

[Ally]

Asian interest drives Alberta's black gold rush




Just a decade ago, Alberta's oilsands were dismissed by skeptics -including many in the oil industry -as little more than an expensive science project.




The province's vast but low-grade bitumen deposits were widely seen as too remote, too costly to exploit and too expensive to upgrade.




How the world has changed. When oil prices began their explosive multi-year ascent in 2003, soaring from about $28 US per barrel to $147 by mid-2008, it unleashed the biggest investment stampede in Alberta's history.





Read the full article here.

 

[Ally]

Challenges remain, but momentum building in Alberta economy




EDMONTON - Two years after the Great Recession ended, Alberta's energy-fuelled economy is again flexing its muscles.




With oil prices tripling from their 2009 lows, drilling activity on the upswing, unemployment falling and oilsands investment surging, Alberta looks poised for a new growth supercycle.




In fact, compared with the beleaguered U.S., the debt-ridden economies of Europe or the sluggish growth in Ontario and Quebec, Canada's energy superpower looks like a rising star once again.




Just don't call this new growth cycle a boom - at least not yet. There are still nagging patches of weakness and some serious challenges ahead, both from within and beyond Alberta's borders. To wit: The U.S. recovery remains fragile, China's supercharged economy is slowing, and the 27-month-old bull market in equities looks as if it may be running out of gas.





Read the full article here.

 

[Ally]

Calgary 9th for most expensive homes in Canada: Survey





Calgary is ranked the ninth most expensive housing market in the country, according to the Coldwell Banker Real Estate Home Listing Report.




The report, released Wednesday, is a snapshot survey of average listing prices for four-bedroom, two-bathroom homes in 70 Canadian markets over a six-month period from September 2010 to March this year on coldwellbanker.com.




Calgary`s average came in at $534,912.






Read the full article here.

 

[Ally]

Labour shortage bigger challenge than ever




EDMONTON - An executive from a big-name construction company drew laughs at a recent business conference when he urged everyone in the room to go home and make babies ` so dire is the need for workers in Alberta.




It`s no joke for employers; The labour shortage that plagued Albertans with long lines for service and inflated costs for purchases from burgers to upgraders is back.




The underlying factors never went away even when the economy tanked in late 2008 and 2009, argues Mike Corbett, senior vice-president of David Aplin Recruiting.





Read the full article here.

 

[Ally]

Alberta building industry eneters period of growth




EDMONTON - Since he formed Edmonton-based Clark Builders in 1974, company chairman Andy Clark has seen more than his share of ups and downs.




Despite Alberta`s wild economic cycles, his 700-person company has managed to grow at an impressive clip, through good times and bad.




Revenues for the latest fiscal year surpassed $530 million, not far off the 2009 peak of $600 million. And although Clark Builders` profit margins were squeezed over the past two years, work backlogs are again on the rise, at nearly $1 billion, and margins are edging higher.




While some predict another economic `boom` ahead, however, Clark uses more restrained language.





Read the full article here.

 

[Ally]

Boomtown North: Lessons in growth




FORT MCMURRAY - Descending into Fort McMurray airport, the lush and pristine northern Canadian landscape appears endless, with boreal forest stretching in every direction and rivers flowing through the very heart of the city.




It`s hard to believe that the city is also at the heart of one of Canada`s most controversial regions or that only a few kilometres away are the most prolific oilsands mining operations in the world.




Fort McMurray really was the city that went boom over the last couple of decades, with exploding growth in population, investments, income potential and economic development.





Read the full article here.

 

[Ally]

Alberta mineable and thermal in-situ oilsands interactive map





`This document contains information from a variety of sources. Every effort has been made to verify the accuracy and timeliness of the information. The publisher assumes no responsibility for damages caused by errors or omissions or reliance, in any way, on the information contained herein.`



See the map here.

 

[Ally]

Mining, oilsands open floodgates of capital




EDMONTON - The roots for a solid resurgence in oilsands construction are clear from the estimated $16 billion in capital spending plans announced by some of the big players this year, up from $13.5 billion in 2010.




And according to Alberta`s 2011 energy outlook, non-mining projects will make up a growing component of overall spending.




The SAGD (steam-assisted gravity drainage) in situ projects require a long-term oil price of about $50 a barrel to be economic, less than the $60-plus level for new large oilsands mining projects.




Edmonton area fabrication plants and other service industries provide the lion`s share of products and skilled workers for the oilsands.





Read the full article here.