Calgary's economy poised for steady growth over next 5 years, city report says
Unemployment rate predicted to drop to 5.9% by 2024
Calgary is on track to have five years of solid job growth that will bring the unemployment rate down below six per cent, according to the latest forecast from the city's economics team.
The Calgary and Region Economic Outlook for 2019 to 2024 predicts Calgary's GDP growth will be 1.9 per cent for 2019 — higher than the provincial average of 1.5 per cent and the national rate of 1.7 per cent.
"The City of Calgary and the Calgary Economic Region should have a third straight year of positive economic growth in 2019," said Oyin Shyllon, an economist and regulatory lead for the city.
Expected upticks in the price of oil underpin the optimistic forecast.
"For the forecast period, gradual WCS price growth is expected to lift and sustain economic growth," the report says.
The city's economists predict that Western Canada Select (WCS) prices will rise steadily from $38 US per barrel in 2019 to $52 US per barrel by 2024.
Total employment in the Calgary Economic Region is expected to grow by an annual rate of 1.6 per cent in 2019.
"The regional economy is expected to add 108,500 jobs over the six years from 2018 to 2023. As a result, the unemployment rate is expected to fall to 5.9 per cent in 2024," the report says.
Calgary Mayor Naheed Nenshi said the report points to some good signs of economic growth, but it also supports his sense that the climb out of recession has been too slow.
"It remains in too many ways a jobless recovery," Nenshi said.
"I'm hopeful we can work with the new provincial government to really attract investment and job creation so that we can start pulling that [unemployment]number down," he said.
Office space oversupply
Calgary's considerable oversupply of downtown office space will be slow to fill up again, the report predicts.
"The addition of millions of square feet of office space to downtown Calgary over the last decade is so much that the increase exceeded the total stock of office space in downtown Winnipeg," the report says.
"Calgary's downtown office vacancy rate should abate slowly as job growth picks up. Job growth should support the absorption of office space, and the vacancy rate would decline from 25 to 15 per cent by the end of the forecast horizon."
The forecast assumes there will be no new supply of office space in downtown Calgary through to 2024.
Residential housing starts, on the other hand, are predicted to shift somewhat toward multifamily dwellings, partly due to the effect of stricter mortgage rules and high inventories of unsold homes.
The forecast calls for an average of about 9,000 housing starts overall for the 2019 to 2023 period.
The total residential building investment in Calgary is expected to average $2.6 billion over the coming five years.
Calgary's population is expected to grow by 131,400 in five years with net migration being the primary driver.
The biggest population increases are anticipated to be in the age range of 35- to 44-year-olds.
"The city of Calgary is expected to remain a more attractive destination for migrants relative to other Alberta jurisdictions," the report says.
The report is compiled twice per year by the city's Corporate Economics department to help guide city administration decisions.