October 27, 2011 – Weekly Market Report

Mon, 31 Oct by Dale Russell

Just like we’ve been saying, things in Canada are very good compared to
the rest of the world, at least according to the ordinary Canadians in the
survey results below.   The sense of comfort we have with our current
economic conditions contributes to a healthy housing market.

Folks who believe the economy is good or very good invest in homes,
invest in their businesses, hire people, do research and development to improve
their businesses, and all those things are what contribute to a healthy
economy.

Canadians Think Economy is OK – Todd Hirsch, Senior Economist,
ATB Financial

A quick scan of recent international business news headlines suggests much more worry than optimism, and that worry is reflected in a global survey of attitudes.
Canadians, however, stand out with relatively upbeat attitudes.

IPSOS’s “Global
Economic Pulse” is a survey of participants in 24 countries around the world,
assessing the current economic situation in each country. The survey was
conducted between September 9th-19th.

In Canada, 66% of survey participants judged the Canadian economy to be
in GOOD or VERY GOOD shape at the moment. That puts us in #4 spot globally,
behind Saudi Arabia, Sweden and India. Canada outperforms such economic
hot-spots as China, Germany and Australia. On average, only 39% give their
country such a positive assessment.

Canadian attitudes
stand in sharp contrast to those of our American neighbours, where only 15%
believe the economy to be in good or very good shape. (See graph for top 10 and
bottom 5 countries).

October 20, 2011 – Weekly Market Update

Fri, 21 Oct by Dale Russell

There’s always good news out there if you are willing to look for it, especially in Alberta these days.  In the last few years we’ve become adept at wondering when the other shoe is going to drop.  The media’s current fixation on issues in the US and Europe have some folks wondering when the next bad news will hit.

As everyone in central Alberta knows, the strength of our economy is highly reliant on the price of oil and gas.  There has been some speculation that oil and gas prices are bound to soften as the world economy slows.  A recent article in the Globe and Mail suggests that oil consumption in China is still growing and quotes the oil analysts at Barclays Capital in London who said “There is a large supply deficit in the global oil market, with demand exceeding supply in the third quarter”.

That suggests to us that there is a long term future for Alberta’s oil and gas and the jobs and healthy economy that come with it.

 Manufacturing Shipments Perk-up in August – by Dan Sumner, Economist – ATB Financial

When Canadians think of manufacturing, they typically think of Central Canada. But Alberta’s manufacturing sector has grown in leaps and bounds over the past ten years and more recently has been an important driver behind the post-recession recovery.

Alberta manufacturers managed to grow their shipments 0.4% in August to $5.79 billion. Compared to August of last year, shipments are higher by 15.6%, the second largest year-over-year gain of any province (Saskatchewan has seen the largest at 17.1%).

While shipments were up marginally in August, they have been essentially flat for the last five months (see graph). However, this flatness comes on the heels of nearly straight gains from the middle of 2009 to Q1 of this year. Alberta’s manufacturing sector has also been an important job creation machine recently, adding more jobs than any other sector over the past twelve months.

Nationally the manufacturing story was quite positive in August, with shipments advancing by a higher than expected 1.4%. Canadian shipments have risen two months in a row now, partly a result of the unwinding of effects (supply chain disruptions) associated with the earthquake and tsunami in Japan.

This morning’s national release adds to the evidence that Canadian GDP growth will be positive in Q3, allowing Canada to avoid a technical recession (defined as two consecutive quarters of negative GDP growth).

With a healthy energy sector and rising oil sands production, manufacturing in Alberta should continue to grow in the long run. But in the near-term, shipments from this province will continue to be subject to swings in gasoline and oil product prices.

October 13, 2011 – Weekly Market Update

Thu, 13 Oct by Dale Russell

It’s Time to Invest in Real Estate – The story below about the Alberta job market is a signal that now is a good time to invest in real estate.  When jobs are being created, new people start moving here and many of them will rent for a year or two while they get established in their new jobs and maybe sell a home where they came from.

Buying a townhouse, duplex or single family home to rent out is a manageable proposition for many families and may end up being a more stable investment than the currently very volatile stock market.

The ingredients to a successful investment are all out there right now – ample supply, relatively low prices and low interest rates.  Interest on any money borrowed to buy rental properties is deductible against the income and any profits realized by a gain in value are taxed at the lowest rate as capital gains.  The best part… the tenants will pay off your mortgage over time, leaving you with a valuable asset and a long term, stable income.

Alberta Jobs Story Keeps Getting Sweeter – Dan Sumner, Economist – ATB Financial

Over 2011, Alberta’s job creation figures have impressed even the most optimistic observers. And according to data out this morning, the jobs picture just keeps getting better and better.

Employers in this province added a further 8,600 net positions to payrolls in September, the fifth consecutive month of positive job creation. The last time Alberta saw job gains for five consecutive months was in mid-2006. The unemployment rate also declined in September to 5.4%, matching its low mark of the current economic cycle.

Digging below the headlines, the data was even more interesting. The number of full-time jobs expanded by a stunning 21,400 positions and was offset by a loss of 12,800 part-time positions. The mighty oil and gas extraction category was the largest gainer, adding 10,600 positions in September. Although the gain is impressive, it really just reverses a loss of roughly the same number of jobs the month before, which means the gain is partly related to problems with seasonality in the data.

Nationally the jobs report was similarly positive, with Canadian employment rising by 61,000 positions and blasting through expectations of a gain of 15,000. The upbeat news on the labour market probably couldn’t come at a better time, and serves as a bit of an anchor of hope in this uncertain global economic environment.

Moving forward, it is highly unlikely that Alberta’ labour market is going to be able to keep churning out jobs the way it has in the first three quarters of 2011. Nonetheless, if fears surrounding a European financial crisis and/or US recession are realized, Alberta’s labour market will be entering that period in a strong position.

 

October 6, 2011 – Weekly Market Update

Thu, 06 Oct by Dale Russell

Central Alberta Market Update – Sept 30, 2010

We’ve seen lots of good economic news in Alberta this year and it’s evident in an improved real estate market in central Alberta.  MLS sales from Jan 1, 2011 to Sept. 30 for the area served by the Central Alberta Realtor’s Association are up over the same period in 2010 by 18.27% and that number is generally reflected in most of the municipalities we service with the exceptions of Sylvan Lake (0% change) and Lacombe (+8.4%).

The biggest reason for the improvement lies in the population growth identified below.  People go where the jobs are and Alberta seems to have the best job creation record in the country at the moment.

While sales are up, the relationship between supply and demand hasn’t improved enough to cause prices to change.  In fact, prices could be down a little at the middle to high end of the price spectrum since last year.  Supply and demand balances vary by price range and the low end of the price spectrum is much closer to balance than the high end.

Growing Population – ATB Financial – Weekly Economic Bulletin – Sept. 30/11

Alberta’s population numbers shot up in Q2 2011, according to new Statistics Canada data released this week. The overall provincial population grew by 0.59% in the second quarter, the highest rate since the fourth quarter of 2008. The main driver behind the surge in population growth was a jump in net-international migrants to 8,313, up from only 3,708 in Q1. The province also saw strong levels of interprovincial migration with 4,720 Canadians moving here. Natural increase (births minus deaths) added another 8,190 new Albertans.

A growing population is one of the main factors driving the Alberta economy forward. During the boom years, Alberta’s population grew by as much 99,000 people per year, while even in 2008 and 2009 (which were not strong years economically) the province welcomed nearly 80,000 new residents. The rising population helps fuel growth in a wide range of industries including construction, retail and housing.