Today I'm live blogging from the REALTORS Association of Edmonton Housing Forecast Seminar. First thing of note today is the free internet provided by the city of Edmonton – sweet!
Ron Gilbertson, from the Edmonton Economic Development Corporation (EEDC) talked to us this morning about the economic outlook for Edmonton. I called this article "The 10 Best Things About Edmonton" because the EEDC tends to give a very rosy picture of Edmonton at these types of meetings, I mean, that's their job right? It wasn't all rosy today though… He spoke extremely quickly so please excuse spelling/grammar and the odd incorrect paraphrase…
First he talked about where we are today. Looking at GDP, Edmonton has grown fairly steadily over the past 15 years, but dropped about 1.5% in 2009. Compared to other cities, our average incomes are about 14% ahead of Toronto (whereas 15 years ago we were about even). This is a double edged sword since it makes it more expensive to do business here. 15 year's ago Calgary's GDP per capita was 36% higher than Edmonton and today it is down to 14%.
Retail sales in Edmonton dropped an estimated 10% in 2009, but it's still one of the highest in North America (almost 50% higher than Toronto).
Unemployment has risen, but employment is also on the rise. He expects it to take 6-7 months before we start to see the increase in jobs affect the unemployment rate. Currently we are seeing a growing labour force, so even though employment is rising the unemployment rate has risen slightly.
Office vacancy rates in Edmonton are below the Canadian average downtown, and equal to the Canadian average in suburban office space. Calgary vacancy rates could increase to 17-25% in the next few years partially because of the huge increase in office construction. This could affect Edmonton's commercial rents and vacancy.
Mortgage carrying costs in Edmonton are about average compared to other Canadian cities. At the peak of the market we were quite expensive compared to other Canadian cities.
Edmonton International Airport is one of the fastest growing airports in North America. This is an indicator of Edmonton's economic situation. The quality of air service is certainly a factor in terms of companies considering relocating in Edmonton.
Inflation in down to very modest levels in Edmonton, we are amongst the lowest inflation jurisdictions in North America and it is not currently a issue.
Outlook
Oil prices are on the rise. Natural gas prices are low and there is a pessimistic outlook for natural gas prices for the foreseeable future.
The "International Monetary Fund" predicts that Canada will see growth around 2% – the strongest in the Western world. The average of the major bank predictions are for 2.8% growth this year and 4.3% next year in Alberta. They are predicting Edmonton's GDP growth to be above average for Canadian cities for the next couple of years.
Demand for Oil is expected to increase by 25% while supply is going to drop – the world needs the equivalent of 6 new Saudi Arabia's over the next 20 years to keep supply and demand in check. As the world feels the oil crunch there will be more and more attention on Alberta's oil. This could lead to an over heated economy in Alberta for the next 20 years which is a concern. Edmonton needs to diversify.
The amount of health care we have for a city our size is unparalleled in the world – for example the 425th largest city in the world (us) has the best cardiac care facility in the world.
We are the home of one of the top three nano-technology institutes in the world.
Edmonton has been rated the 3rd most prosperous city in the world based on quality of life, income, GDP, employment etc (Calgary was #1 and Dallas #2).
Overall Mr. Gilbertson gave our "overall status" a B+ rating today and an A rating for the short, medium and longer term future.
Phew! Coffee break time!
