Earlier this month the Edmonton chapter of the Real Estate Institute of Canada held it’s first annual Market Update session focusing on Alberta as a whole and Edmonton also. The Chief Economist for the City of Edmonton, John Rose presented his economic outlook and sorry, no, Mr. Rose’s outlook was not entirely rosy.

The context of his data was international developments, energy prices, regional and local current indicators, and then a longer term outlook for Edmonton, the region, and Alberta as a whole.

Notice the use of the term “current indicators”. In economics there are 3 types of indicators, leading, current and trailing. Leading indicators tell us what is likely going to happen in the near future, current indicators tell us what is happening and trailing indicators tell us what has already happened…so let’s look at the current indicators and see what “is” happening.

All information provided courtesy of the City of Edmonton.


Starting internationally, the global recovery continues but momentum is waning. Growth forecasts in most areas have been reduced and some Euro zone countries are showing signs of stress. Global financial markets remain fragile and the US/China disputes are slowing growth in both countries.

Oil prices continue trending downward with West Texas Intermediate (WTI) creeping towards the 5-year low of around $50 US. The forecast is for continued weakness. 


Here in Alberta, of course the discount on Western Canada Select continues and we sit somewhat below the $50 US mark. Our production currently sits right around our export capacity and new pipelines are sorely needed.

Capital expenditures by industry in general are down significantly but most of it is due to a big drop in oil and gas extraction industry drops. The industry is down from levels of $35-60B/yr over the last decade to about $27B/yr the last 4 years.


Finally, at home in Calgary and Edmonton, the unemployment rate was trending downwards for a year or more, but a lot of that is due to our governments’ convenient counting method that doesn’t count you any more once you can’t find a job for a year. Apparently that’s our fault so it doesn’t count any more.

Okay, off my soapbox and back to facts, the downward trend in unemployment has reversed and we are sitting around 7% unemployment at the moment in both Edmonton and Calgary while overall employment rate continues to climb, so that is a good sign in a sea of trouble.

Consumer inflation is, not surprisingly, continuing to soften as rates have fallen over the past year to under 1.5% per annum in Edmonton and just slightly over 1.5% in Calgary. It is forecast to remain below 2% for the remainder of the year.


Housing starts in Edmonton continue lower but stable with the one year moving average remaining around 2000 units/yr over the last 3 years although the value of building permits has dropped over the last four quarters steadily and the one year moving average is down to almost exactly $1B per quarter. Calgary is also down but total permit value for the year is expected to come in at $4.3B which should be slightly higher than Edmonton. This is due more to a decrease in commercial permit value although residential permit value is down a bit also.

The City of Edmonton is predicting a slow return to moderate sustainable growth rates of around 2%/yr over the course of 2020 and 2021. Interestingly, the average age in Canada is 41 with Alberta being slightly younger at 37.8, while Edmonton is younger still at 37.7. Calgary squeaks in the lowest with an average age of 36.

Okay so what are risks to the forecasts? What would economics be without the usual suspects?

Oil prices falling further will have a major negative effect on energy investment and provincial government spending.

Debt, rising interest rates and inflation could cause consumer confidence to falter.

A number of major construction projects in the Edmonton region coming to conclusion could cause a contraction in the building sector.

Stricter controls on carbon emissions and more opposition to energy investments would dampen energy sector growth.

Growing international trade conflicts could limit global growth.

So there you go, not the rosiest outlook we’ve ever seen in the region but we shall persevere. Albertans are naturally resilient and business oriented, we may be down but don’t count us out!