Calgary's economy has shifted from 'recession' to slow 'recovery,' economists predict
Economists say city has likely hit bottom and should see modest growth next year
Calgary's unemployment rate has hit double digits and the office vacancy rate is over 25 per cent, but a pair of economists are putting a slightly positive spin on the city's economic prospects for next year.
Glen Hodgson, senior fellow with the Conference Board of Canada, says the "R" word in Calgary in 2017 will stand for recovery, not recession.
However, he cautions that the recovery will be slow, with a return to only modest growth after two years of economic contraction.
"After two tough years, it's not quite happy days are here again, but we are forming the floor now, things will be better in 2017," he said.
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"Even things like rising unemployment rates in Calgary may be signs of recovery because people are actually searching for jobs again," said Hodgson.
His colleague Todd Hirsch agrees. The chief economist at ATB Financial says the very worst is likely past for the Calgary economy.
The two economist were speaking Tuesday at the annual economic outlook conference, hosted by Calgary Economic Development.
Jobs not coming back quickly
However, Hirsch cautions it will take a while for the city's high unemployment rate to come down.
"Just as the labour market lagged the downturn, coming out we will also see a lag in the labour market, with unemployment remaining quite high for a while," he said.
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Hirsch says while the energy sector got hammered, other sectors of the economy resisted the provincial downturn fairly well, including tourism, construction, forestry, high tech and cultural industries.
He says diversification is important, but establishing a new industry takes time. He thinks Calgary and Alberta should focus diversification efforts on existing strengths.
"We're really good at developing energy systems in this province, I think we need to not turn from petroleum and oil and gas molecules, but add to them in that energy folder; more diversity, more clean energy," said Hirsch.
"That's what the world wants and I think Alberta is well positioned to provide that."
The CEO of Calgary Economic Development says the agency is focusing its efforts on attracting new business to the city as well as encouraging start-ups.
Mary Moran says the available talent pool and the low price of office and manufacturing space make the city an attractive prospect right now.