CALGARY — Calgary will set the pace for economic growth for the next three years, buoyed by a strong energy sector as well as growth in employment and population.
“With employment growing vigorously again and population growth back to pre-recession pace, Calgary’s economic picture is sunny again,” said Mario Lefebvre, director of the Centre for Municipal Studies with the Conference Board of Canada, who was at the 2013 Economic Outlook luncheon Thursday organized by Calgary Economic Development.
“Things are really rosy . . . There’s something happening in this city.”
Lefebvre said Calgary will lead the country in 2013 with economic growth of 3.6 per cent and its average annual growth of 3.7 per cent between 2014-2016 will also top the nation.
He said 40,000 jobs have been created in Calgary since the beginning of 2011. Solid job creation has fuelled domestic demand, lifting retail sales growth and housing starts.
Lefebvre said employment growth in Calgary will be 4.0 per cent in 2012 followed by about 3.5 per cent next year.
Lefebvre also said that population growth is almost back to where it was prior to the 2008-2009 recession, ensuring continued growth in domestic demand over the medium term. Population growth is expected to be in the range of 2.5 per cent in 2012 and 2013, he said, which will lead to a healthy housing market and retail sector.
Over the long term, he said population growth is a main driver of the Calgary economy. Lefebvre said the city’s performance is something other major urban centres in the country are not capable of matching on a sustained basis.
“Although it remains a risk-filled global economic environment, the most likely scenario is for continued moderate economic growth across Canada, with inflation staying well contained and interest rates remaining low,” said Craig Alexander, senior vice-president and chief economist with the TD Bank Group, who also made a presentation at the outlook luncheon. “Prospects for a soft-landing in China’s economy should support commodity prices. This bodes well for Alberta, which is expected to lead the provincial economic growth rankings in 2013.”
Alexander said Alberta will average 3.0 per cent economic growth in the 2013-2014 period, which will lead the country. Canada’s average growth for the same period is forecast to be 2.2 per cent.
He said there is no housing bubble in Canada but there is some over-valuation in the market of about 10 per cent. But the over-valuation is not spread out evenly across the country. Vancouver is the most over-valued market in the country followed by Toronto.
Alexander said the Calgary housing market is different. Economic fundamentals in the city support the level of home prices which he says will continue to rise at a slow pace in the next couple of years.
He said the world economy is still in recovery mode and the European economic crisis is far from being resolved.
“Europe is the slowest moving train wreck in a long time,” he said.
Bruce Graham, president and chief executive of Calgary Economic Development, said the annual economic outlook event “provides Calgary decision makers with the opportunity to validate their opinions on current market trends and conditions, which will ultimately influence the future direction they take in their organizational planning.
“Calgary has had a very strong year economically . . . As I travel around the world, Calgary does have a message of optimism.”
He said labour attraction is a key to sustaining economic success.
Calgary Mayor Naheed Nenshi said the city can’t rest on its laurels despite a rosy economic picture and it needs to be a “beacon for the best talent in the world.”