November 2010 Alberta Economic Fundamentals

[Ally]

Schizophrenic real estate market challenges sellers

For home sellers in Calgary, the current market is challenging. Just when it looks like it is starting to pick up, it slumps again. According to Doug Hayden of Kim and Doug Royal Lepage, this is a schizophrenic market.

"It`s like we`re dealing with two different markets. I`ve never seen it before," says Hayden. He explains that in a normal market, what happens at one price point typically occurs at all price points. This is currently not the case in Calgary.

For the first time, Hayden is seeing the average price of houses drop, the mid priced houses sit, and the executive or estate houses are sell. What is happening below the $500,000 price point is not occurring above it. Hayden says that he is puzzled by this as there are lots of good houses at reasonable prices that are not selling.

Hayden says that this summer has been off by 50 per cent from last year. The market appeared to be picking up in late August but that was due more to sellers pulling their listings than houses selling. In this type of market, sellers need to do all they can to attract serious buyers.

Read the full article here.

 

[Ally]

Calgary loses more jobs

CALGARY - Calgary`s employment picture in October was a sharp contrast to the rest of the province which led the country in job growth.

While the labour market across Alberta is picking up, at the local level it`s still tough for many people looking for employment.

Anna Melnick, who is in the communications and public relations industry, has been experiencing this first hand in the past month or so.

"I have been finished my last contract since the middle/end of August. I took a month off to go travelling. So I`ve been looking for the last month and I`m all over the professional job boards," she said. "I`ve interviewed for a couple. Some within Calgary, some outside of Calgary. It`s just tough right now for a person in my position. I`m only a year out of school. So it`s just very tough.

Read the full article here.

 

[Ally]

Peak oil guru Robert Hirsch gives the definitive guide to the coming energy fiasco

There is no greater advocate of peak oil than Robert Hirsch, who directed America`s nuclear energy program in the 1970s and authored the first major warning to the Energy Department in 2005.

Hirsch repeated his warning at last month`s ASPO-USA conference and said the time has come to adjust your lifestyle and portfolio.

Read the full article here.

 

[Ally]

What happens when the world`s largest oil producer runs out of oil?

One of the inexorable results of the developing shortage of oil is that prices will rise. It is a prospect that does not particularly concern the Saudi Arabian Administration, Minister Al-Naimi having recently inflated the acceptable range for crude up to $90 a barrel, and JP Morgan has recently predicted an imminent rise to $100, a theme apparently now also taken up by Libya. Higher oil costs lead to higher fuel bills, and there is already a report in the United Kingdom that, in consequence , there may already be an increase in winter deaths.

Because demand for imported oil in countries such as China and India continues to increase at a steady rate, it will only be through the increase in production from the exporting nations that supply can meet such demand, and prices can be held at a relatively stable level.

Read the full article here.

 

[Ally]

Former BC Exec: Here`s why peak oil is real

Peak oilists, who gather every year at ASPO-USA, are happy that mainstream media and politicians are acknowledging the concept of diminishing production.

However, they can`t understand why the reaction has been so muted.

Former BP Chief Petroleum Engineer Jeremy Gilbert just gave an excellent presentation that responds to every argument against peak oil and emphasizes the need for immediate action.

Read the full article here.

 

[Ally]

Oil is giong to US$300 a barrel, peak oil coming soon

Charles Maxwell, a former energy exec who is now an analyst at Weeden & Co., says "peak oil" will drive oil prices to US$300 a barrel over the next decade.

Alternative energy won`t save us, he says: It`s just too small a percentage of the overall energy market to matter. And neither will natural gas, coal, and other fossil fuels, which come with their own problems.

What will save us — because we`ll be forced to do it — is conservation: We`ll find ways to do more with less. We`ll also have to start eating root vegetables in the winter, because it will be too expensive to fly in plane-loads of vegetables from Chile.

Olivier Ludwig of IndexUniverse has a good interview with Maxwell here.

Here are some highlights:

Read the full article here.

 

[Ally]

Alberta job growth highest in the country

EDMONTON — Alberta added 17,000 jobs in October, dropping the seasonally adjusted unemployment rate to six per cent from 6.2 per cent in September, the strongest growth in the nation.

Alberta`s unemployment rate is now the third lowest after Manitoba and Saskatchewan, according to Statistics Canada`s labour force report released Friday.

Nova Scotia had the biggest decline of any province, with 8,600 fewer people working last month.

The Alberta job tally included 3,000 more people working in full-time jobs during the period, and 14,000 more working part-time.

ATB Financial senior economist Todd Hirsch notes there was a large surge in jobs (more than 10,000) in health care and social assistance.

"Employment in this sector continues to be one of the fastest growing with total jobs up 8.7 per cent from twelve months ago. The construction sector (up 8,100 jobs) and forestry, oil and gas (up 4,200 jobs) also showed some notable gains," he said in a release.

Read the full article here.

 

[Ally]

IEA sees oil peak looming on China demand

PARIS/LONDON — Global oil supplies will come close to a peak by 2035 when oil prices will exceed $200 a barrel, the International Energy Agency said on Tuesday, as China and other emerging economies drive demand higher.

The IEA, in its 2010 World Energy Outlook, said crude oil output had already peaked and would flatten out in the next 10 years, boosting reliance on costlier and more polluting unconventional sources such as oil sands.

"Production in total does not peak before 2035, though it comes close to doing so," the IEA said in the executive summary of the report. That projection was according to the report`s central case, the New Policies scenario.

The Paris-based IEA, which advises 28 industrialised countries, also raised its mid- and long-term oil price forecasts, despite slashing oil demand estimates by 2035, citing growing supply uncertainty.

Oil prices would rise even further if governments did not act to curb consumption, the IEA`s chief economist and lead author of the report, Fatih Birol, told Reuters in an interview

Read the full article here.

 

[Ally]

Proposed Edmonton property tax increase pegged at 5%

EDMONTON — The draft 2011 city budget being released Tuesday morning is expected to recommend spending that will boost average property taxes in Edmonton by roughly $75.

Council approved guidelines in June that would see taxes rise two percentage points for a fund to pay for repairs to neighbourhood roads, sidewalks and street lights, with another three percentage points for other operations.

"Without a doubt, all during the election campaign and even the months leading into it, there was a hue and cry from the general public saying, `We don`t want a huge increase, three per cent (for operations) is about the maximum amount we would support,` " Coun. Jane Batty said Monday.

Some councillors were uncomfortable last summer with a suggestion to help keep a lid on taxes by raising Edmonton Transit fares faster than scheduled.

Batty expects she and her colleagues will have to look at every department to decide what spending is necessary and what can be cancelled or postponed.

Read the full article here.

 

[Ally]

Edmonton housing starts lowest since June 2009

EDMONTON — Despite a strong spring, the slowing trend in new-home construction became clear in October with housing starts dropping to their lowest level since June 2009 in the Edmonton region, the Canada Mortgage and Housing Corporation reported Monday.

CMHC said 755 units were started in October, down from 947 units in October of last year.

But strong numbers earlier in the year boosted the overall tally for the first 10 months of 2010, with 8,646 units started compared with 4,567 units in the first 10 months of 2009.

The industry is on track to come close to the 10-year annual average recorded from 2000 to 2009, said Richard Goatcher, CMHC`s senior market analyst for Edmonton.

And ATB Financial says despite a slowing trend since the spring, stronger demand for new homes in Alberta should return by late in 2011.

Read the full article here.

 

[Ally]

Alberta Number 1 for Startups - Business Browser

ALBERTA NO. 1 FOR STARTUPS

CALGARY / When it comes to starting a new business, there`s no better place to be than in Alberta.

That`s the finding of a new report by the Canadian Federation of Independent Business. The federation, with 107,000 business owner members across the country, said Alberta holds five of the top 10 positions on its list of Canada`s top entrepreneurial cities, with Grande Prairie in first place and Edmonton in sixth.

The top 10 entrepreneurial cities across Canada, as ranked by the CFIB, are: Grande Prairie, Lloydminster (Alberta/Saskatchewan), Saskatoon, Prince Albert, Kelowna, Edmonton, Red Deer, Parksville (British Columbia), Saint-Georges (Quebec) and Wood Buffalo (Fort McMurray area). Calgary placed 13th overall.

Read the full article here.

 

[Ally]

Calgary condo project sells out first two towers

CALGARY - The University City new highrise condo project, planned for the Brentwood LRT station, has completely sold out the first two phases of the development.

Now registration has begun for the next two phases of the transit oriented development across from the University of Calgary.

On the weekend, Phase 1 of the project, a 216-unit, 18-storey residential tower, and Phase 2, another 216-residence, 18-storey tower, sold out. As of today the project`s website shows no availability of units in the first two phases.

It also invites potential buyers to register for sales for phases 3 and 4.

Zee Zebian, marketing manager for the project, said all sales have been halted "because we need to catch up on the paperwork."

Read the full article here.

 

[Ally]

U.S. economic pain may be Alberta oilpatch gain when it comes to labour costs

CALGARY - The U.S. economy`s pain could be Alberta`s gain — at least when it comes to labour costs in the oilpatch.

With its unemployment rate stuck at 9.6 per cent, the United States has plenty of workers to spare, many of whom have skills coveted in Canada`s energy sector.

"It`s a golden opportunity, I think, for Alberta companies right now," said Todd Hirsch, an economist with ATB Financial.

The U.S. housing bust took a severe toll on that country`s construction sector, leaving scores of skilled tradespeople out of work. Many of those jobs — welders and electricians, for example — would be a good match for what Alberta`s oilpatch needs, Hirsch said.

And the United States is an "obvious and attractive" place to recruit workers since it has so much in common with Canada, Hirsch added.

"Someone who has a welding ticket from Indonesia — we don`t really sometimes know what that means," he said.

"The fact that Canada and the United States share a language and have similar cultures — we can be pretty sure that if they`re a ticketed welder from Illinois, that they`re going to be able to come to Alberta and do just fine."

Read the full article here.

 

[Ally]

Calgary airport tunnel back on table; $250,000 approved for study

Council has fast-tracked work toward tunnel access to the Calgary International Airport, reviving a plan aldermen had repeatedly shelved before Naheed Nenshi became mayor -- and almost did again at Monday`s meeting.

Under the new plan, city hall will spend $250,000 trying to determine the actual cost of the east-west roadway beneath a new runway -- to cut through claims that range from $40 million to more than $800 million -- and formally restart negotiations with the airport authority.

The decision followed a bitter debate pitting Nenshi and the pro-tunnel majority against a smaller group led by Ald. Gord Lowe that demanded an exhaustive business-case study by February before taking a costly risk on the project.

With the airport about to start constructing its runway in April, the tunnel work must start then, too, or its price will skyrocket later.

"This attempt to delay, obfuscate and, I would argue, to kill this project -- if you don`t like the project, vote against the main motion," Nenshi told council.

Read the full article here.

 

[Ally]

Edmonton mayor aims to lower tax hike to 3%

EDMONTON - The City of Edmonton budget keeps the proposed 2011 tax hike to five per cent with moves that include higher transit fares, extra photo-radar revenue and possibly more mosquitoes.

The typical homeowner will see a $120 boost in taxes and utility fees next year under the budget released Tuesday, which delivered the tax hike council requested by finding $50.6-million worth of extra revenue and spending cuts.

But Mayor Stephen Mandel hopes he can push the tax increase even lower before the budget is passed in December.

"I think it could be as low as three per cent, just depending on how we do things," he said.

"In these economic times it`s important, the message we send to our citizens about fiscal responsibility … we don`t want to reduce services, I think there are things we can do (in) a more creative way."

Read the full article here.

 

[Ally]

Nearly 1,000 acres of land offered for sale in Alberta oil sands regionFORT MCMURRAY, AB, Nov. 10 /CNW/ - In response to pent-up demand for industrial land in Fort McMurray, the Government of Alberta has released 980.51 acres of contiguous Crown land for sale. The release is one of the largest ever for Fort McMurray-area land not designated for oil sands exploration and production. Located in the Regional Municipality of Wood Buffalo, the parcel is situated approximately five kilometres south of Fort McMurray in an area known as "Southlands," adjacent to the east side of Highway 63.

Susan Lore, Associate, Royal LePage True North Realty/The Lore Project Marketing Group and Terry Kilburn, a founding member of Avison Young, have been awarded the assignment to conduct a process to solicit Offers to Purchase for the outright sale of this future industrial development land.

Alberta Infrastructure, the provincial ministry responsible for providing public infrastructure, is administering the sale.

The asking price for the entire 980.51-acre parcel is $28 million, which equates to approximately $30,000 per acre.

Read the full article here.

 

[Ally]

Alberta job growth highest in the country

EDMONTON — Alberta added 17,000 jobs in October, dropping the seasonally adjusted unemployment rate to six per cent from 6.2 per cent in September, the strongest growth in the nation.

Alberta`s unemployment rate is now the third lowest after Manitoba and Saskatchewan, according to Statistics Canada`s labour force report released Friday.

Nova Scotia had the biggest decline of any province, with 8,600 fewer people working last month.

The Alberta job tally included 3,000 more people working in full-time jobs during the period, and 14,000 more working part-time.

ATB Financial senior economist Todd Hirsch notes there was a large surge in jobs (more than 10,000) in health care and social assistance.

Read the full article here.

 

[Ally]

Smooth ride ahead for Emdonton housing market

EDMONTON — "Modest," "moderate," "stable" were all words used to describe the Edmonton housing market in 2011 at a Canada Mortgage and Housing Corp. conference Tuesday.

No facet of the homes market — new, existing or rental — is expected to see dramatic gains or declines next year, according to the CMHC Housing Outlook.

Richard Goatcher, the federal agency`s senior market analyst for Edmonton, said that`s because economic indicators that drive housing demand — especially full-time employment and in-migration — have been so-so.

"For home-ownership demand, the real improvement is going to show up in 2012," Goatcher said.

Read the full article here.

 

[Ally]

Natural gas glut changes global energy forecast

There was some good news/bad news today for British Columbia, and for global efforts to curtail greenhouse gas emissions.

A global glut of natural gas will keep prices of the fossil fuel depressed for at least a decade, threatening efforts to boost investment in renewable energy, the International Energy Agency says in a report released Tuesday in London.

The IEA`s World Energy Outlook for 2010 - an annual forcast of energy supply, demand and consumption authored by the world`s developed nations including Canada and the United States - anticipates a global oversupply of gas on the order of 200 billion cubic meters beginning next year according to a Reuters story.

That`s more than three times the excess supply that was available as recently as 2007.

Even rising global gas use, which will increase faster than any other fossil fuel, won`t overcome a production surge that is emerging from shale gas resource development in the United States, and in Canada.

Read the full article here.

 

[Ally]

IEA sees end to natural gas glut

Relief is on the way for gas investors who got hammered during the recession, but they`ll have to wait a while: The natural gas glut will probably peak next year and fade gradually over the next decade as demand rises strongly in China.

The tentative end of the glut, which pushed down the value of gas-heavy investment funds by about 40 per cent during the recession, was one of the main conclusions of the International Energy Agency`s flagship World Energy Outlook report, released Tuesday in Paris and London. The 738-page report predicted the surplus would rise to 200 billion cubic metres next year, up from 130 billion this year, followed by a "hesitant decline" over the next decade or so, suggesting prices may have bottomed out but will not bounce back quickly.

Read the full article here.