July 27, 2009
Economy at a Glance — July 27, 2009
Where is the economic and construction action in Canada’s major cities?
By Alex Carrick, Chief Economist, CanaData
It is always fascinating to consider what is happening in the major cities across the country. Which cities are in the vanguard and which are bringing up the rear?
This is all about the economy at the local level. It ties in to economic sectors that are expanding, contracting or staying at an even keel. It often means assessing the outlook for raw material markets, although in larger urban centres, services play major roles. Generally speaking, diversity is good because it helps cities weather economic storms better. Much of what follows refers to CanaData’s composite ranking of city labour markets based on employment growth (highest to lowest) and unemployment rates (lowest to highest).
As of Statistics Canada’s latest labour market report, for June 2009, Regina and Saskatoon are the number one and number three ranked cities for labour markets in the country. Both cities are experiencing rapid job growth and low unemployment rates. As a result, Saskatchewan has the lowest unemployment rate in the country, at only 4.6% versus 8.6% for Canada as a whole. Saskatchewan’s treasure chest of raw materials, in energy, grains, potash, uranium and even diamonds, is finally getting recognition.
The major cities in the Atlantic region are doing much better than during previous recessions. They are now poised to benefit from a recovery in natural resources in two primary ways. Once housing starts move up in the United States, the Atlantic’s forestry sector will make gains. And as oil prices advance, Newfoundland’s offshore industry will move back into prosperity. This will also be an incentive for more mega project investments in the region. Finally, Saint John, N.B. has recently completed an LNG project that will reap rewards due to assured feedstock supplies from Trinidad and Tobago.
For all that the oil and gas sector has been in retreat in this recession, Edmonton and Calgary are still among the best labour markets in the nation. They have unemployment rates (6.5% and 6.6% respectively) that are significantly lower than in Canada as a whole. The latest demographic report, for the first quarter of this year, from Statistics Canada highlights that Alberta’s population is still growing the fastest among all of the provinces. Despite project delay announcements <0x2212> some of which have now been rescinded many people have not been fooled into thinking that it is all over for Alberta’s oil patch.
Seven of the eight cities at the bottom of the ranking are in Ontario. That is due to the problems in the manufacturing sector, combined with construction markets that are seeing housing start declines, retail and office building faltering and not much lift so far from engineering work. This may be about to change with utility construction and bridge, road, highway and rapid transit work spurred on by government infrastructure programs. However, one extra shot of stimulus that was supposed to come from a nuclear power plant expansion program has now been moved off the stove top, at least until the federal government can sort out the ownership structure of Atomic Energy of Canada (AECL).
The three worst labour markets are in southwestern Ontario London, Windsor and St. Catharines-Niagara. The latter two have had to worry about auto sector jobs, although positions are being saved in Windsor as Chrysler has emerged from Chapter 11 and is calling back workers.
Pity St. Catharines-Niagara, first hit by auto sector closures, then having to adjust to fewer American tourists. The trip to Canada for U.S. visitors has been made much harder since they cannot return home without proper papers. Most Americans are not used to going through the application process and incurring the expense of acquiring a passport.
For more articles by Alex Carrick on the Canadian and U.S. economies, please see his market insights. Mr. Carrick also has a blog site. His lifestyle blog entries are at www.alexcarrick.com
