May 2011 Alberta Economic Fundamentals

[Ally]

Harper win seen as good news for oilpatch




Monday's election results are being seen as good news for the oilpatch.




At least, that was the sentiment around town on Tuesday morning.




"As good a result as we could hope for because a Liberal/NDP alliance would have likely meant more taxes and environmental rules," said a longtime energy insider, expressing hope that there would also be changes on the regulatory front to avoid another failed process such as what befell the Mackenzie Valley pipeline.




What else does a Conservative majority imply?







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[Ally]

Vacancy rates drop in Calgary suburban, Beltline office markets





CALGARY ` The vacancy rates in Calgary`s suburban and Beltline office markets are continuing to decline with increased demand for leasing in those areas.




A report by Colliers International says the suburban office market had a vacancy rate of 9.44 per cent in the first quarter of this year, down from 10.92 per cent in the previous quarter and from 11.25 per cent in the first quarter of 2010.




The Beltline has also experienced falling vacancy rates from 17.83 in the first quarter of 2010 to 11.86 per cent in the fourth quarter of 2010 to 10.77 per cent in the first quarter of 2011.





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[Ally]

Upgraders pay off for oilsands companies





As Canada`s oil sands companies report earnings from a quarter marked by roaring crude prices, they reveal the startling financial consequences of the different production strategies used to exploit Alberta`s massive resources.




Results vary according to the type of crude the companies produce, and the difference is substantial. For instance, Suncor Energy Inc. (SU-T41.43-0.12-0.29%), which reported Tuesday, pulled in $90.47 per barrel for the vast majority of its oil sands output. Cenovus Energy Inc. (CVE-T34.54-0.76-2.15%), on the other hand, sold its oil sands crude for just $62.63.





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[Ally]

Suncor speeds up oil projects





EDMONTON - Awash in cash with an operating profit that rose fourfold for the first three months of 2011 compared with the same period of 2010, Suncor Energy hinted Tuesday that it will speed up its major oilsands projects where possible.




That means a prompt restart for work on the half-built Voyageur upgrader, which will be completed under a joint-venture deal with French oil giant Total.




It means moving ahead on engineering and planning for its Fort Hills mine project, and if possible quickening the move to open the new North Steepbank mine, which offers more efficient ore trucking than the huge and expanding Millenium mine.



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[Ally]

Employment growth to help Alberta housing demand





CALGARY ` Improving economic conditions and employment growth will lead to Alberta`s recovery in the residential real estate market, says a national economist.




Warren Jestin, senior vice-president and chief economist with Scotiabank, who was in Calgary Wednesday, said housing demand in the province is underpinned by rising employment and incomes, low borrowing costs and population inflows from other parts of the country.




`Overall, we anticipate a modest pickup in home sales this year, and relatively flat average prices,` he said. `Still, this would leave sales roughly 30 per cent below the unsustainable record levels of 2006-2007.`





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[Ally]

Calgary industrial real estate powers ahead




Calgary has The Bow, Encana's imposing new headquarters. At 59 storeys, it's the tallest skyscraper in Western Canada.




Vancouver is abuzz over Telus Corp.'s $750-million scheme to build a new 22-storey downtown headquarters and adjacent 44storey condo tower.




Yes, Edmonton has its own marquee downtown office project -Qualico Developments' spiffy new 28-storey Epcor Tower.




But Edmonton isn't Calgary or Vancouver. The head-office sector here is small and demand for new office space is often anemic.




On the flip side, Edmonton really flexes its muscles in other areas, notably the industrial real estate market. And it's big.





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[Ally]

Suncor posts higher first quarter profits, vows to work with Tory government on the environment




Suncor Energy said Tuesday it will work the new Tory government to work on `common sense` sustainable development policies for the oilsands.




At the company`s annual meeting in Calgary, Suncor boss Rick George said he wasn`t disappointed with a Harper majority and said his company is willing to help craft politics that reduce the environmental impact of oilsands development.




`This is a resources and an industry that`s very important to the future of this country and with that we have a responsibility to reduce our environmental footprint,` he told reporters after his speech. `We`re glad with whatever government Canadians choose, obviously a majority government will give us a stable government for a number of years here and my own view of this is that the next couple decades belong to Canada. So let`s just hope we get good common sense policies.`





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[Ally]

Alberta subsidized housing gets $100M boost





EDMONTON - Carrie Smiley blinks back tears when she thinks about the pain and uncertainty that ruled her life eight years ago.




Her marriage had fallen apart. She and her two young daughters were forced from their home. After four years as a stay-at-home mom, the only job she could get was casual office work with no guaranteed hours.




`I had no money,` she says. `You start to feel like you don`t know where to turn, you don`t know where to go.`




Eventually, she and her girls were approved for subsidized housing, and she credits her stable housing situation with helping her work her way into a management position.





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[Ally]

Western Canadian cities to lead economic growth in 2011





Ottawa, May 5, 2011 ` Four cities located in Saskatchewan and Alberta will occupy the top four spots in the economic growth leader board, according to the Spring 2011 edition of The Conference Board of Canada`s Metropolitan Outlook.







`Buoyed by the resources and energy sectors, the economies of Saskatoon, Calgary, Regina and Edmonton will post noticeably stronger growth than the other cities covered in this report,` said Mario Lefebvre, Director, Centre for Municipal Studies. This publication provides a five-year outlook for 13 of Canada`s largest census metropolitan areas (CMA).







Saskatoon and Regina are benefiting from strong resource development in the province, while healthy population growth is bolstering the housing markets in both cities. The medium term outlook is also bright, with both economies expected to grow at an even faster pace. Saskatoon`s economy will expand by 4.1 per cent this year, and is expected to remain among the CMA growth leaders through 2013. Regina`s real gross domestic product (GDP) is slated to rise by 3.1 per cent this year.



A promising outlook for the Alberta energy sector will be a boon for the Calgary and Edmonton economies. Calgary remains the services hub for the province`s energy sector and is forecast to post the second strongest economic growth rate (behind Saskatoon) at 3.4 per cent this year. Although the energy sector will bolster Edmonton`s outlook, real GDP is forecast to increase by 3.1 per cent in 2011`down slightly from its 2010 pace`due to more moderate growth in the construction, manufacturing and services sectors.







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[Ally]

Is peak oil coming?




The price of oil isn`t the only hydrocarbon going through the roof. Check out thermal coal prices to see how dependent economic growth has become on burning increasing amounts of fossil fuels. Prices of Newcastle coal, the Asian coal price benchmark, are poised to rise by as much as 30 per cent this year, approaching the peak levels seen in 2008.





It is no surprise the countries driving global coal demand through the roof are the same countries pushing global crude demand. Find the fastest growing economies, and you will find where demand for oil and coal are the strongest.





China`s coal consumption is expected to rise by another 10 per cent this year, propelled by strong economic growth, the soaring prices of diesel fuel and the fact water levels at most of the country`s hydroelectric sites are well below normal due to the severe drought this winter.







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[Ally]

The shale revolution




The detection and exploitation of shale gas has been described as nothing less than a revolution in the world energy industry, promising to transform not only the prospects of the gas industry, but of world energy trade, geopolitics and climate policy. Some estimates of the gas recoverable from the Marcellus shale discovery in Pennsylvania alone are equivalent to 25 years' U.S. consumption and worth potentially $2-trillion.




The Marcellus discovery alerted the world beyond the gas industry to shale gas. Similar shales exist on all continents. By one estimate, there are 688 suitable shale deposits in 142 basins, only a handful of which have yet been explored. It is unlikely that Marcellus will turn out to be the richest deposit in the world.




Initially, environmentalists welcomed shale gas. However, as it became apparent that shale gas was a competitive threat to renewable energy as well as to coal, the green movement has turned against shale. Its criticism is fivefold.





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[Ally]

Shell raises capacity at Scotford Upgrader facility




Royal Dutch Shell PLC said Wednesday it has started to process heavy oil at the Scotford Upgrader expansion in Alberta, increasing capacity at the facility near Edmonton by 100,000 barrels a day, to 255,000 b/d, from its Athabasca oil sands operations.







`This start-up is an important milestone for our heavy oil business,` said Marvin Odum, Shell Upstream Americas director. `And it adds new capacity from an important source of oil in a world requiring more secure energy.`




The upgrader processes heavy oil from two oil sands mining operations ` Muskeg River and Jackpine. Shell owns 60% of the projects, while Chevron Corp. and Marathon Oil Corp. each own 20%.





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[Ally]

Alberta's delinquent homeowners lead the pack





A growing number of homeowners in Alberta are struggling to meet their mortgage payments as Calgary suffers a six-year real estate decline that is only recently showing signs of improvement.




Homeowners in the province are nearly twice as likely to fall behind than those in the rest of Canada. And the proportion struggling to make mortgage payments is the highest it has been since at least 1990, according to fresh data from the Canadian Bankers Association.




The rising rate of delinquency comes as economists warn that Canadians are under increasing pressure when it comes to servicing their debts.





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[Ally]

Edmonton one of Canada's top three fastest growing economies




EDMONTON - Edmonton will rank among the fastest-growing regional economies in Canada again this year, according to the Conference Board of Canada`s latest metro forecast.




Alberta`s capital region is expected to post real growth of about 3.1 per cent for 2011, tying it with Regina for third spot, according to the board`s spring Metropolitan Outlook report.




While that`s lower than the 3.8 per cent growth rate Edmonton`s economy recorded for 2010, only Saskatoon and Calgary are expected to top the city`s performance for 2011, the board said.





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[Ally]

Dream big, Albertans urged




A report issued Thursday by the Premier's Council for Economic Strategy should be required reading for all Albertans.




It's an honest attempt by a bluechip panel of non-partisan experts -chaired by former federal cabinet minister David Emerson -to address the very real challenges and opportunities facing this province's 3.7 million citizens.




The 112-page report's key themes and recommendations aren't revolutionary. Much of the ground covered -the need to diversify the economy, address pressing environmental issues, control program spending and curb the province's reliance on energy royalties -will sound familiar to many.





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[Ally]

Alberta loses 4,200 part-time jobs in April




EDMONTON - Alberta lost 13,300 part-time jobs in April, but gained 9,100 full-time jobs, according to Statistics Canada figures released Friday.




The net loss to Alberta was 4,200 jobs.




Employment and Immigration Minister Thomas Lukaszuk says he takes that as good news ` not because he likes seeing people lose any job, but because full-time jobs are on the upswing.




The rise in full-time jobs over part-time signals employers are growing more confident in the economy, he said.





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[Ally]

Strong energy prices boost Alberta's bottom line



EDMONTON ` Rising oil and gas prices and a rebounding economy may help Alberta avoid plunging all the way into a forecast $3.4-billion deficit, Alberta`s premier said Friday.





Ed Stelmach told the Alberta Weekly Newspaper Association that the first-quarter budget update is likely going to show a much better bottom line than the government forecast earlier this spring.





He told reporters later that if the trend continues, Alberta could be back in the black in 2012 as promised, rather than waiting two more years as prescribed in the 2011 budget.





But he warned it is very early and the future is unpredictable.




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[Ally]

Alberta energy woos Asia




Remember when Chinese energy giants were knocking on Alberta`s doors, looking for any million barrels they could take home, fuelling national hysteria that China was plotting to take control of Canada`s resources?




Now, it`s the top Western Canadian energy producers that are seeking them out ` as well as other Asian interests.







Encana Corp., Nexen Inc., Devon Energy Corp., Cenovus Energy Inc., Athabasca Oil Sands Corp. are among the major companies reaching out to Asia for arrangements ` from joint ventures, to outright sales ` to help them speed up development of natural gas shale or oil sands projects, amid a push to open a new export market across the Pacific for Canadian oil and gas.





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[Ally]

Alberta economic snapshot for May 6, 2011







CALGARY, AB, May 6, 2011, Troy Media. ` The Alberta economy has generally been showing signs of strong improvement recently but, although the labour market has also improved over the past year, gains have been erratic at best.




After starting the year off with a bang, employment in Alberta dipped in April for the second consecutive month. The total number of individuals on payrolls fell by 4,200 in April, following a drop of 3,200 in March and gains of 21,600 and 13,700 in January and February respectively (see graph).






The April Alberta employment report is a hard one to gauge overall direction from. Some industries, including manufacturing (-8,500) and trade (-8,600) saw major job losses in April while others like finance, insurance and real estate (+7,800) and public services (+6,400), saw large gains.





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[Ally]

Aussies court skilled workers as Alberta labour crunch looms




With a massive worker shortage looming over Alberta, an Australian job fair in Calgary offered a glimpse of what could be an international battle for labour.




Nine-hundred people crowded into a downtown hotel ballroom Saturday to check out the fair where oil, gas and mining companies tried to woo skilled, senior-level Alberta workers.




The fair, which continues in the city today and next weekend in Edmonton, comes on the heels of a warning from the province`s employment minister that Alberta could face a labour shortage of 77,000 people in the next 10 years.




Rupert Merrick, the organizer of the Opportunities Australia Expo, said Australia is in the midst of its own labour crunch because of booms in the mining and oil and gas sectors.





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