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Ward 1 News: Corporate Economics - Spring 2017

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Spring 2017
Calgary and Region
Economic Outlook 2017-2022

Calgary’s economy peaked in 2014 with the spike in oil prices. Since then the Calgary economy has declined. The outlook calls for growth to begin this year but it will take several years before 2014 levels of economic activity re¬turn. For example, the jobs lost during the recession are not expected to fully return to Calgary before 2018 and the economic activities are not back to pre-recession GDP level till 2019

City of Calgary
• Housing starts dropped from 10,699 units in 2015 to 7,777 units in 2016 due to weak employment growth and household formations. However, the low interest rates encouraged buyers. Total annual housing starts are anticipated to fall to 7,600 units in 2017 due to declined affordability and expected higher interest rates, but reach 9,400 units in 2022.
• Calgary’s office vacancy rate for Q1 2017 is estimated between 20 to 25 per cent, up significantly from 2015 levels. As one third of the full-time jobs in Calgary are office jobs, the office space market and the job market are closely tied together. With the anticipated drop of the unemployment rate from 9.0 per cent in 2016 to 6 per cent in 2021, the office space market will be relieved, too.
• The combination of weak population and employment growth dropped the total building permit values to $4.7 billion in 2016 from $6.3 billion for 2015. The outlook calls for further drop to $3.1 billion in 2017, rising to $5.5 by 2022.

Calgary Economic Region (CER)
• The estimated loss of 19,000 jobs in 2015-2016 on a net basis, from peak to trough, impacted severely the transportation and warehousing (-12,000), health (-7,000), manufacturing (-6,000) and forestry, mining and oil and gas (-5000) sectors. On the other hand, job gains were registered in professional, scientific, and technical services (8.000) and retail trade (6,000). Total employment will start recovering from 859,000 in 2016 to 870,000 in 2017 and 885,000 in 2018. Total employment growth is expected to be 100,000 persons for the 2017-2022 period, down from 125,000 for the 2010-2015 period.
• CER’s unemployment rate rose to an average of 9.0 per cent in 2016, up from 6.3 per cent in 2015 following the adjustments during the recession period. The forecast calls for an average of 8.5 per cent in 2017; a further relief in the labour market should follow in 2018 with an average of 7.5 per cent. In the forecasted 2017-2022 period, the unemployment rate is expected to drop to the 6.8 per cent in average, higher than the average of 5.4 per cent in the 2015-2020 period.

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This content represents the personal views and opinions of the Councillor and should not be taken as a statement of policy of The City of Calgary. The inclusion of any external content does not imply endorsement by The City of Calgary.

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