Edmonton s Economic Outlook <Details> December 6, 2018 John Rose Chief Economist Financial and Corporate Services
Agenda The Context Regional & Local Current Indicators Long-Term Outlook Edmonton, the Region and Alberta Risks to the Outlook 2
Unemployment rate moving lower Recent run-up in Edmonton s unemployment rate was driven largely by labour force growth. A recent shift away from part-time job gains will support consumer spending over the next 12 to 18 months. Unemployment in the Edmonton region will drift down slowly over the balance of 2018. 12 10 8 6 4 2 0 Unemployment Rate % 3 Month Moving Average Canada Alberta Calgary Edmonton Source: Statistics Canada, Table 14-10-0294-01 3
Employment and Unemployment Rate Edmonton CMA,000s 800 790 780 770 760 750 740 730 720 710 700 % 9 8 7 6 5 4 3 2 1 0 Employment (left axis) Unemployment Rate (right axis) Source: Statistics Canada, Table 14-10-0294-01 4
Change in Employment October 2017 to October 2018 Three-month moving average Job Gains Job Losses Alberta (49,700) Public Administration 10,100 Logistics -5,500 Health Care 7,800 Agriculture -4,300 Educational Services 7,200 FIRE -3,700 Information, Culture and Recreation 6,800 Accommodation and Food Services Edmonton CMA (27,400) -2,800 Public Administration 20,000 Logistics -11,600 Business, Building and Other Support Services 9,100 Other services -10,800 Construction 6,400 Utilities -3,800 Educational Services 5,600 Agriculture -1,500 Source: Statistics Canada, Tables 14-10-0091-01 and 14-10-0097-01 5 Financial Strategies and Budget Financial and Corporate Services Alberta s
Consumer inflation to gradually ease The region s year-over-year inflation rate slowed sharply in 2016 and then began to accelerate Energy prices have been a key driver of inflation with natural gas, electricity and gasoline highly volatile Forecast is for inflation to remain slightly above 2.5% then gradually move back to the 2% range for 2019 Higher inflation will erode real incomes for Edmonton residents as average weekly wages rising at a rate slightly below CPI 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0-0.5 Year-over-Year % Change in CPI Canada Alberta Edmonton Source: Statistics Canada, Table 18-10-0004-13 6
Housing Starts City of Edmonton Units 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 Singles Multiples One-Year Moving Average (Total) Source: Canada Mortgage and Housing Corporation 7
Non-Residential Investment Edmonton CMA $, millions 1,200 1,000 800 600 400 200 0 Source: Statistics Canada Industrial Commercial Government
Value of Building Permits Edmonton CMA $, millions 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 Residential Non-residential 1 Year Moving-Average Source: Statistics Canada, Table 34-10-0066-01 9
Moderate growth in the longer term Real GDP Growth, % 8 6 4 2 0-2 -4 The City of Edmonton experienced a sharp slow down in 2015 and 2016. City and region made a clear recovery to faster growth in 2017, along with the province Continuing in-migration will allow the City and the region to grow more rapidly than Alberta and Canada in the final years of the outlook. Edmonton CMA City of Edmonton Source: City of Edmonton, Stokes Economics 10
Putting future growth into perspective $ (,000s) 80 City of Edmonton Real GDP per capita 70 60 50 40 30 20 10 2018 City of Edmonton: $67,302 Alberta: $74,687 Canada: $50, 918 0 Source: City of Edmonton, Stokes Economics, Conference Board of Canada; 2007 dollars 11
Edmonton s Demographic Advantage Average Age Canada 41.0 Alberta 37.8 City of Edmonton 37.7 Source: Statistics Canada 12
Risks to the Edmonton Outlook Oil prices fall through late 2018 and into 2019 causing a severe slump in energy investment and provincial government spending. Consumer confidence falters with concerns growing over debt, rising interest rates, and inflation. Conclusion of a number of major construction projects in the Edmonton region leads to further contraction in the building sector. Stricter controls on carbon emissions and opposition to energy investments constrain longer term growth in the energy sector. Growing international trade conflicts limit global growth and depress commodity prices as well as reduced exports of manufactured goods and professional services. 13
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Thank you! <Details> John Rose Chief Economist Financial and Corporate Services 780-496-6144 John.rose@edmonton.ca 15