May 2011 Alberta Economic Fundamentals

[Ally]

RBC sides with the bulls after across-the-board market correction




EDMONTON - Oil prices rose nearly $6 US a barrel Monday as commodities rebounded from last week's across-the-board sell-off.




The jump in crude to about $103 a barrel in New York still leaves prices more than 10 per cent below the recent high of $115.




Prices for gold, copper and silver -which plunged 30 per cent last week, their worst one-week slide since 1975 -also snapped back in what many analysts described as an expected "relief" rally.




The turnaround sparked Toronto's lead equity index to a gain of 110 points, to 13,677.13. In New York, the Dow Jones Industrial Average gained 46 points to 12,684.68, while the S&P 500 Index rose six points to 1,346.29.







Read the full article here.

 

[Ally]

Alberta MLS sales to top country in 2012





CALGARY ` Alberta will lead the country next year in the annual percentage growth for MLS sales, according to the Canadian Real Estate Association.




The association on Monday said the province will see MLS sales increase by 6.7 per cent in 2012 to 56,650 units following a 6.8 per cent gain this year to 53,100 units.




At the national level, CREA is forecasting MLS sales to decline by 1.3 per cent this year to 441,100 transactions and rebound with 2.6 per cent growth in 2012 to 452,500 units.




The association is predicting the average MLS sale price in Alberta will rise by 0.1 per cent this year to $352,500 followed by a 1.6 per cent jump next year to $358,100.



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[Ally]

Northern Gateway Pipeline will get federal review





EDMONTON - Premier Ed Stelmach told ambassadors from India and China on Tuesday that Canada`s federal energy regulator has ordered full public hearings into a proposed multibillion dollar pipeline project that would run from the Edmonton region to the B.C. coast.




The hearings, scheduled to begin January 2012, will advance the hotly controversial $5.5-billion Northern Gateway Pipeline, a key component of Stelmach`s plan to `grow Alberta`s economic pie` by opening markets in China, India and other Asian countries.




`With respect to the pipeline to the West Coast, we had good news last Friday,` Stelmach said Tuesday.




`The federal government announced a joint panel to review ... the Gateway Pipeline to Kitimat. When we were in (China`s) Great Hall of the People, the question was how much oil can we buy; when we were in New Delhi, the question was how much natural gas.



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[Ally]

Calgary building permits rise in April





CALGARY ` Building permit applications in Calgary rose in April compared with a year ago.




According to the City of Calgary, the estimated construction value of building permit applications for the month was $347 million, up 28 per cent compared with April 2010`s $272 million.




It was also up seven per cent compared with the five-year average of $325 million and up 12 per cent compared with the 10-year average of $309 million.




`Activity in the non-residential sector boosted overall building permit values for the month of April,` said Mary Axworthy, acting general manager of planning, development and assessment for the city. `Improvement projects led the way, with 202 of 246 non-residential permits being for improvements.`





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[Ally]

China oil demand hit third highest level in April





BEIJING ` China`s implied oil demand hit its third highest monthly level ever in April as refineries stepped up output to ensure domestic supplies, shrugging off soaring oil prices, but the year-on-year growth rate slipped to 8.8 per cent after six consecutive months of double-digit gains.




At the current pace, China has surpassed a growth rate of 5 per cent to 7 per cent in oil consumption suggested in a Reuters poll earlier this year.




China, which has driven global oil demand growth for the past decade, is also ahead of the International Energy Agency (IEA) forecast for it to account for 40 per cent of increased global crude use of 1.4 million bpd in 2011.



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[Ally]

Edmonton housing starts down 46% from last year




EDMONTON - Homebuilders in the Edmonton census metropolitan area were less busy in April than they were a year earlier.




Canada Mortgage and Housing Corp. said Monday 758 homes were started in the month, down 46.1 per cent from 1,407 in April 2010.




Single-detached homebuilders began construction on 436 units in April, a decrease of 30 per cent from 620 a year earlier.




`This time last year the industry was working hard to replenish depleted inventories, whereas this spring the volume of complete and unabsorbed units is considerably higher,` CMHC senior market analyst for Edmonton Richard Goatcher said.




The federal agency said multi-family homes also fell year-over-year to 322 units, down 59 per cent from 787.





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[Ally]

Are falling oil prices good or bad?




Are falling oil prices good or bad? The answer depends on your perspective and the factors causing oil to fall.




For Canadians with an index-like portfolio allocation, falling oil prices are bad, as the Energy sector represents a little less than one-third of the benchmark S&P/TSX Index.




While lower oil prices are clearly negative for oil exporting nations and energy-geared stock markets like Canada`s, there is also a positive side to the story.




The recent spike in oil prices was threatening the global economic recovery, as higher oil prices act like a tax on consumers and business.




In that regard, the decline in oil prices is a welcome development, as it gives consumers and businesses a break, and puts the global economic recovery on a firmer footing.





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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]

First Nations stand ground




In case their unequivocal message hasn`t been received, British Columbia`s First Nations are in Calgary this week to make it clear to the board of directors of Enbridge Inc., Enbridge`s annual meeting of shareholders and members of the broader oil community that the proposed $5.5-billion Northern Gateway pipeline is not going forward.




It will be a difficult message to accept. The pipeline between the oil sands in Alberta and Kitimat on the northern coast of B.C. is a big plank in the oil-and-gas industry`s strategy to develop a new market for its products in Asia, a major part of Enbridge`s growth strategy, a key piece of strategic infrastructure for all of Canada, and a major job creator for Western Canada.






But it`s a message that requires full consideration.





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[Ally]

Calgary retail sales to balloon to $28.3 billion by 2015





CALGARY ` Annual retail sales in the Calgary census metropolitan area are forecast to balloon to more than $28.3 billion a year by 2015 ` nearly $7 billion higher than they were last year.




The Conference Board of Canada, in a spring report, said the Calgary CMA will continue to benefit from a pickup up in consumer spending which started last year as annual growth in retail sales will hit 6.4 per cent this year followed by hikes of 5.6 per cent, 5.4 per cent, 5.4 per cent and 5.2 per cent in each successive year.




`Retail sales finished the year 2010 on a high note, setting the stage for solid retail activity this year,` said the conference board in its Metropolitan Outlook-Spring 2011 report.



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[Ally]

Calgary council stips firm of accreditation




EDMONTON ` The provincial council that regulates new building inspectors has stripped an inspection company of its accreditation, an extraordinary step that has been taken once before in the council`s 15-year history.




On Wednesday, the Safety Codes Council cancelled the accreditation of Innovative Inspection Agency Inc., a company operated by the same people who ran Alberta Permit Pro, one of the defendants in the multimillion-dollar Penhorwood condominium lawsuit in Fort McMurray.




Safety Codes Council president Brian Alford said his organization received complaints from three municipalities and investigated each complaint.





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[Ally]

A former BP executive explains why peak oil is real





This morning, President Obama announced plans to ease restrictions on oil and gas drilling in the U.S. and off its coasts. His move comes in the wake of recent gas prices, which may now be moderating slightly.






But will it be enough?




Former BP Chief Petroleum Engineer Jeremy Gilbert gave an excellent presentation on peak oil at last year's ASPO-USA conference that responds to every argument against peak oil and emphasizes the need for immediate action.



Read the full article here.

 

[Ally]

Trillions predicted in oilsands spending




CALGARY ` The recession that clouded the future of oilsands development two years ago has lifted and clear skies beckon trillions of dollars of investment, according to a report released Monday.




Over the next 25 years, through 2035, $2.077 trillion will be invested in building and maintaining the oilsands, according to the Canadian Energy Research Institute.




That includes $253 billion in initial capital for construction and $1.8 trillion for operation, maintenance and sustaining capital.




`The projects ... that were delayed are now back being developed again, there are more projects, some projects have moved forward in time,` said CERI president and chief executive Peter Howard in an interview.





Read the full article here.

 

[Ally]

Alberta moves to regulate home inspections





EDMONTON ` Alberta homebuyers won greater protections last week after the provincial government passed new rules requiring resale home inspectors to be licensed by the province.







The Home Inspection Business Regulation, passed by the provincial cabinet on Wednesday, requires not only that inspectors be licensed but that they carry $1 million in errors and omissions insurance and post a $10,000 security to cover consumer losses if they fail to do their jobs.







The new regulation also bans contracts that limit liability, establishes minimum qualifications and allows for prosecution under the Fair Trading Act with a maximum fine of $100,000.



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[Ally]

City of Edmonton and Katz Group reach arena deal




EDMONTON - Plans for a downtown arena took a major step forward Wednesday when the city and the Katz Group reached an agreement in principle to build the facility.




`I`m elated. This is, to my mind, the start of a dream come true to rebuild our downtown,` Mayor Stephen Mandel told a hastily called late-evening news conference.




`If we all work together to bring it in on budget, we will make this very special.`




The deal, approved by an 8-5 council vote following an hours-long meeting behind closed doors, closely follows a 17-part motion passed in April that laid out what the city wants to see happen.





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[Ally]

Alberta fires expected to impact oil industry




Shell Canada Ltd. said Thursday it was pulling non-essential workers from its vast oilsands mining operations north of Fort McMurray, Alta., as wildfire smoke drifted toward the site.




The winds had previously moved smoke north from the site, but overnight they changed direction and brought heavier smoke into the area.




"This action is a precautionary measure to ensure people who may be sensitive to these conditions and those not essential to ongoing operations are returned home safely," Shell said in a release.





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[Ally]

Alberta retail sales show second highest annual growth rate





CALGARY ` Retail sales in Alberta dropped in March from February, but the province still experienced the second highest annual growth rate in the country among all provinces.




Statistics Canada reported Friday that retail sales in Alberta were $5.2 billion in March, down 0.1 per cent from the previous month but up 4.4 per cent from March 2010.




Saskatchewan led the country with 5.0 per cent year-over-year growth.




`Alberta retail sales have been stuck in a fairly flat trend for the past five months as consumers in the province have been leery of spending beyond their means,` said Dan Sumner, economist with ATB Financial in Calgary. `Currently, the seasonally-adjusted $5.182 billion in provincial retail sales are just below their all-time high reached in June 2008.




Read the full article here.

 

[Ally]

Calgary house prices expected to grow 5% to 7%





CALGARY ` Short-term year-over-year price growth for Calgary`s housing market is expected to be in the five to seven per cent range, says the Conference Board of Canada.




The board`s Metro Resale Index indicates the average price in the city for a residential property in April was $407,900, up from $393,427 in March and from $395,468 in April 2010.




The board also classified Calgary`s housing market as being in balanced conditions.




The seasonally-adjusted annual rate of house sales in the city in April was 21,312, which was down slightly from March`s 21,840 and from April 2010`s 23,556.




Read the full article here.

 

[Ally]

Interprovincial migration to Alberta set to pick up



During the economic boom of the mid 2000s, Alberta saw a massive influx of interprovincial migrants. When the recession hit, the inflow of Canadians slowed and so far is yet to really recover. However, with the unemployment rate, wages, and housing prices all in Alberta`s favour, in-migration is set to pick back up.





The most important factor that drives migrants to a certain regions is job prospects. Currently the unemployment rate in Alberta is 1.7 percentage points lower than in Canada and two full percentage points lower than in Ontario. This provides an incentive for Canadians to relocate to Alberta and, if history is any guide (see graph), net interprovincial migration to Alberta could as much as triple from 2010 levels over the next few years.





In addition to the favourable unemployment differential, wages and housing prices in Alberta are also supportive of higher net-migration to Alberta. Wages in Alberta are the highest in the country (by far) at over 15 per cent higher than the Canadian average. And, compared to the boom years, housing prices have cooled off in Alberta relative to other provinces, which makes relocating here more affordable.





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[Ally]

Alberta records fastest EI decline in the country




CALGARY ` Alberta has recorded the fastest decline in Employment Insurance benefits in the country, according to Statistics Canada.




The federal agency reported Thursday that the number of people receiving regular EI benefits in March fell in the province to 39,310, a drop of 25.3 per cent (or 13,320 people) compared with March 2010 and a decline of 6.7 per cent (or 2,820 people) from February.




In Calgary, Statistics Canada said regular EI recipients are down 31.2 per cent or 6,010 people from a year ago to 13,230. It was the 12th consecutive monthly year-over-year decline.




Will van`t Veld, an economist with ATB Financial, said men were hit harder than women during the recession, but males are now shedding the EI rolls at a faster pace, down 29.5 per cent year-over-year versus 23.3 per cent for women.



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