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first q
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calgary economic reportinformation :: insight :: analysis
in this issUe:
Quick read 01
oil & gas markets review 02
labour market review 03
financial market review 06
real estate market review 07
special report 09
major capital projects 12
first QUarter 2006
may 2006
the QUicK reaD
total employment increased in the
Calgary economic region by 38,800
year-over-year in q1 2006. all of
these positions were full-time and
the unemployment rate declined to
3.9%, from 4.6%.
Non-market (geo-political tensions)
and market (supply-demand
balance) factors combined to push
prices 27% ahead of price levels
one year ago to average at u.s.
$63.35/bbl. OPeC kept its
production quota unchanged and
this along with seasonally low
second quarter demand increased
crude oil inventory levels worldwide.
■
■
Natural gas prices in Canada
maintained a close relationship
with price movements in the
united states. Mild winter weather
in Canada and the u.s. and
production recovery in the Gulf of
Mexico held prices 9.0% above last
year’s level to average $7.15/GJ.
Natural gas inventory storage levels
are at a peak at the end of the
withdrawal season, due to mild
winter weather in North america.
the Canadian dollar climbed to a
15-year high of 87 cents u.s. in the
first quarter of 2006, up from 82
cents the same time last year or
by 6.0%.
■
■
On March 7, the Bank of Canada
raised its key policy rate - the target
for the overnight rate - by one
quarter of a percentage point to
3.0%, the fifth increase in a
six-month period.
inflation in Calgary increased to
3.6% in the first quarter of the year,
from 1.3% the same time last year.
Low mortgage rates, strong
employment and wage gains
supported housing activity as
housing starts increased to 3,844
units in the first quarter of 2006.
the City issued 42.3% more in
building permits and the sales of
existing homes increased by 9.1%.
■
■
■
table 1: the Quick read table
indicator q1-06 q4-05 quarterly Change q1-05 annual Change
employment (‘000) 673.0 652.7 20.3 634.2 38.8
unemployment rate (%) 3.9 4.4 (0.5) 4.6 (0.6)
West texas intermediate (u.s.$/bbl) 63.35 60.03 3.31 49.71 13.64
Natural Gas (Cdn$/GJ) 7.15 10.78 (3.63) 6.55 0.60
Prime Business Loan rate (%) 5.33 4.83 0.50 4.25 1.08
exchange rate 0.87 0.85 0.01 0.82 0.05
inflation (y-o-y % change) 3.6 2.8 0.8 1.3 2.3
Housing starts (units) 3,844 3,295 549 2,911 933
Building Permits ($million) 1,190.2 1,012.3 177.9 836.4 353.8
MLs residential sales (units) 8,965 7,078 1,887 6,810 2,155
MLs residential average Price ($) 306,390 264,208 42,182 244,040 62,351
Compiled by: the City of Calgary - Corporate economics, april 2006
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oil anD gas marKets reVieW
Crude Oil Price(West Texas Intermediate)
Mar-02 Mar-03 Mar-04 Mar-05 Mar-0620.00
25.00
30.00
35.00
40.00
45.00
50.00
55.00
60.00
65.00
$US
/Bar
rel
Sources: Federal Reserve Bank of St. Louis & Corporate Economics
Natural Gas Price(AECO/NIT)
Mar-02 Mar-03 Mar-04 Mar-05 Mar-062.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
11.00
$Cd
n/G
J
Sources: GLJ Publications Inc. & Corporate Economics
West texas intermediate (Wti)uncertainties regarding oil supply remains, …..
the price of West texas intermediate (Wti), the bench-
mark for light, sweet crude in North america, averaged
u.s.$63.35/bbl (figure 1) in the first quarter of 2006, up
from u.s.$49.71/bbl a year ago, or by 27.0%, despite
significant inventory recovery in the united states and no
change to OPeC production quota. the same factors that
drove prices in 2005, such as:
stronger than expected global oil demand growth in North
america, China and non-OeCD asia;
low spare crude oil production capacity worldwide and
uncertainties regarding oil supplies from Nigeria, iran,
iraq and Venezuela,
are expected to affect prices in the near term. an active
hurricane season in the united states and other extreme
weather worldwide could add to the already high risk
premium for oil.
u.s. commercial crude oil inventories (excluding those in
the strategic Petroleum reserve) increased to 346.0 million
barrels (table 2) as at april 7, 2006, from 321.1 million
barrels a year ago, which is well above the upper end of the
average range for this time of year.
■
■
■
natural gasbut mild winter weather weakened gas prices.
the average price for natural gas at the aeCO1/Nova
inventory transfer (Nit) market center, averaged Cdn$7.15/
GJ (figure 2) in the first quarter of 2006, up from Cdn$6.55/
GJ the same time last year, or by 9.2%, despite the fact that
North american inventories are above their seasonal norms.
Natural gas prices were supported by relatively high prices
for competing oil-based products, tight supply, decline in
natural gas production due largely to the hurricane-induced
infrastructure disruptions in the Gulf of Mexico and continued
strength in gas-intensive demand in North america.
Working gas in storage in the united states was 1,695 Bcf
as at March 31, 2006, 63.0% above the 5-year average of
1,041 Bcf. storage levels in Western and eastern Canada
were 121.4 and 97.2 Bcf respectively. Much of the high
storage levels are accounted for by unexpectedly warm
winter weather in North america.
2
1the aeCO “C” spot price, which is the alberta gas trading price, has become one of North america’s leading price-setting benchmarks. it is closely tied to the Henry Hub
natural gas price after accounting for transportation costs and exchange rate movements (http://www.energy.gov.ab.ca/304.asp).
table 2: comparison of U.s. crude oil stock in 2006 and 2005
u.s. Crude Oil stock - millions of barrels 7-apr-06 31-Mar-06 7-apr-05
Crude Oil stock (excluding sPr) 346 342.8 321.1
Motor Gasoline 207.9 211.8 212
Distillate fuel Oil 117.4 121.6 104.5
all Other Oils 334 331.9 335.8
Crude Oil in sPr 686.5 686.3 688.9
total stock 1,691.80 1,694.30 1,662.3
source: u.s. energy information administration
figure 1 figure 2
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Job creation remained above trend. the pace of hiring was brisk in the
Calgary economic region in the
first quarter of 2006, with payrolls
expanding to 673,000 (table 3), up
from 634,200 the same time last year,
or by 6.1%. the employment gain was
mainly in full-time positions (+44,800),
as part-time employment shrank by
6,000 jobs.
On a quarter-over-quarter basis, total
employment grew by 20,300 jobs.
the last quarter of growth at that
pace was the third quarter of 1998
(+39,700).
Between March 2005 and March
2006, employment grew faster than
the labour force, pushing the regional
unemployment rate down to 3.9%,
from 4.6% (table 4 and figure 3).
3
the region’s labor force participation
rate increased to 74.8% in the first
quarter of the year from 73.2% last
year, as workers entered the labor force
to take advantage of increasing job
opportunities. Calgary accounted for
about 67% of the employment gains
in alberta, year-over-year (table 4).
alberta Human resources and
employment has identified states of
the labour force based on certain
unemployment rates. an unemployment
rate between 4% and 5% is a tight
labour market, with an unemployment
rate below 4% as a labour shortage.
Calgary’s labour market is therefore in
a shortage position.
Calgary’s Labour Market
6%
5%
4%
3%
Surplus Labour Market
Balanced Labour Market
Tight Labour Market
Shortage Labour Market
Demand < Supply
Demand = Supply
Demand > Supply
Demand >> Supply
Source: Alberta Human Resources and EmployentMar-02 Mar-03 Mar-04 Mar-05 Mar-060
10
20
30
40
Em
plo
ymen
t C
han
ge
(’00
0 p
erso
ns)
3
3.5
4
4.5
5
5.5
6
Un
emp
loym
ent R
ate(%
)
Employment ChangeUnemployment Rate
Labour Force StatisticsCalgary Economic Region
Sources: Statistics Canada & Corporate Economics
Mar-00 Mar-01 Mar-02 Mar-03 Mar-04 Mar-05 Mar-06-15
-10
-5
0
5
10
15
20
Man
ufa
ctu
rin
g E
mp
loym
ent
Gai
ns
(’00
0 P
erso
ns)
0.60
0.65
0.70
0.75
0.80
0.85
0.90
Can
adian
Do
llar(U
S¢/C
dn
$)
Manufacturing EmploymentCanadian Dollar
Canadian Dollar and Manufacturing Employment(US¢/Cdn$, ‘000 Persons)
Sources: Bank of Canada, Statistics Canada & Corporate Economics
figure 4figure 3
employment by industrythe increases in employment were
predominantly in the service-producing
sectors (+28,900). these gains were
led by professional, scientific and
technical services (+13,100),
educational services (+9,500) and
health care and social services
(+8,900) (table 3).
the growth leader in the goods-
producing sector was forestry, fishing,
mining, oil and gas (+8,600), while the
manufacturing industry (table 3 and
figure 4) lost 2,200 positions due to the
appreciation of the Canadian dollar and
weakening international demand.
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table 4: labour force statistics economic regions (unadjusted)
regions Description q1-06 q4-05 quarterly Change q1-05 annual ChangeCalgary Working age Population (‘000) 936.2 927.6 8.6 907.6 28.6 Labour force (‘000) 700.6 682.7 17.8 664.6 35.9 employment (‘000) 673.0 652.7 20.3 634.2 38.8 employment rate (%) 71.9 70.4 1.5 69.9 2.0 unemployment (%) 27.6 30.1 (2.5) 30.4 (2.9) unemployment rate (%) 3.9 4.4 (0.5) 4.6 (0.6) Labour force Participation rate 74.8 73.6 1.2 73.2 1.6
alberta Working age Population (‘000) 2,595.7 2,574.7 21.1 2,529.2 66.5 Labour force (‘000) 1,870.8 1,869.5 1.3 1,824.1 46.6 employment (‘000) 1,805.8 1,795.6 10.2 1,748.3 57.5 employment rate (%) 69.6 69.7 (0.2) 69.1 0.4 unemployment (%) 65.0 73.9 (9.0) 75.9 (10.9) unemployment rate (%) 3.5 4.0 (0.5) 4.2 (0.7) Labour force Participation rate 71.8 72.5 (0.6) 72.0 (0.2)
Canada Working age Population (‘000) 26.022.0 25,929.4 92.6 25,618.4 403.6 Labour force (‘000) 17,216.6 17,336.5 (119.8) 17,010.0 206.7 employment (‘000) 16,032.5 16,284.9 (252.4) 15,742.4 290.1 employment rate (%) 61.6 62.8 (1.2) 61.4 0.2 unemployment (%) 1,184.1 1,051.6 132.5 1,267.6 (83.5) unemployment rate (%) 6.9 6.1 0.8 7.5 (0.6) Labour force Participation rate 66.1 66.8 (0.7) 66.3 (0.2)
source: statistics Canada & the City of Calgary - Corporate economics, april 2006
4
2the numbers in the tables may not add up due to rounding errors.
table 3: employment by industry (‘000) calgary economic region (unadjusted)
Description q1-06 q4-05 quarterly Change q1-05 annual Changeall industries 673.0 652.7 20.3 634.2 38.8 full-time employment 566.2 544.6 21.6 521.4 44.8 Part-time employment 106.8 108.1 (1.3) 112.8 (6.0)Goods - Producing sector 162.4 157.4 5.0 152.5 9.9 agriculture 4.4 5.8 (1.4) 3.9 0.5 forestry, fishing, Mining, Oil & Gas 48.3 45.0 3.3 39.8 8.6 utilities 7.1 5.4 1.7 3.9 3.3 Construction 55.0 57.4 (2.4) 55.3 (0.4) Manufacturing 47.6 43.8 3.8 49.8 (2.2)service - Producing sector 510.6 495.3 15.3 481.7 28.9 trade 104.9 90.8 14.1 106.1 (1.2) transportation & Warehousing 42.4 47.5 (5.1) 40.9 1.5 finance, insurance, real estate & Leasing 42.5 41.2 1.3 41.5 1.0 Professional, scientific, & technical services 77.1 77.2 (0.0) 64.0 13.1 Business Building and Other support 22.3 21.8 0.5 24.7 (2.4) educational services 47.0 41.8 5.3 37.5 9.5 Health Care & social assistance 65.3 62.3 3.0 56.4 8.9 information, Culture & recreation 28.8 31.4 (2.6) 26.6 2.2 accommodation & food services 39.4 35.5 3.9 39.7 (0.3) Other services 22.6 27.8 (5.2) 25.1 (2.5) Public administration 18.2 18.2 0.0 19.2 (1.0) unclassified 0.0 0.0 0.0 0.0 0.0
source: statistics Canada & the City of Calgary - Corporate economics, april 2006
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employment by occupationssignificant job increases occurred in trades (+13,400),
business (+12,400) and social science (+11,300)
occupations (table 5). there were losses in occupations
unique to processing, manufacturing and utilities (-5,900).
employment by ageamong the age group (both genders) 20 to 29, employment
increased by 30,200, which offset the losses suffered among
the 30 to 34 olds (-2,800) (table 6), 15-19 (-6,900), 40-44
(-2,500) and 45-49 (-4,900).
Population in the 15 to 29 cohorts is expected to decline
between 2005 and 2010, while population in the higher age
cohorts (45 and above) is projected to increase.3
this explains the decline in the unemployment rate among
the 25 to 29 age group from 11.1% to 5.4%, as the number
of people 15 to 29 years of age is declining at a faster rate
relative to the number of available positions (table 7). the
number of people available to work in the higher age cohorts
is increasing at a faster rate than employment, consequently
increasing the unemployment rate in these age cohorts.
table 6: employment by age (‘000) calgary economic region (unadjusted)
Description q1-06 q4-05 quarterly Change q1-05 annual Change
15-19 35.3 34.1 1.2 37.2 (1.9)
20-24 66.3 62.5 3.8 55.5 10.7
25-29 86.9 80.3 6.6 67.4 19.5
30-34 77.5 81.3 (3.8) 80.3 (2.8)
35-39 78.5 81.3 (2.7) 75.0 3.6
40-44 89.8 90.3 (0.5) 92.3 (2.5)
45-49 81.4 82.5 (1.1) 86.2 (4.9)
50-54 71.9 62.8 9.1 63.3 8.5
55-59 49.4 44.3 5.1 38.9 10.4
60-64 27.4 26.1 1.3 23.4 4.0
65-69 6.1 4.7 1.3 10.1 (4.0)
70-74 0.5 1.1 (0.6) 3.0 (2.5)
source: statistics Canada & the City of Calgary - Corporate economics, april 2006
table 7: Unemployment rate by age (%) calgary economic region
Description q1-06 q4-05 quarterly Change q1-05 annual Change
15-19 3.9 4.4 (0.5) 4.6 (0.6)
20-24 10.9 11.5 (0.6) 11.8 (0.8)
25-29 5.4 5.8 (0.4) 11.1 (5.7)
30-34 1.8 4.6 (2.7) 6.5 (4.6)
35-39 2.9 2.8 0.0 3.0 (0.2)
40-44 4.5 4.3 0.2 3.3 1.1
45-49 2.5 2.1 0.4 2.3 0.2
50-54 3.3 3.2 0.1 2.6 0.7
55-59 4.5 4.0 0.5 3.3 1.2
60-64 4.1 5.1 (1.0) 2.8 1.3
source: statistics Canada & the City of Calgary - Corporate economics, april 2006
3Calgary & region socio-economic Outlook 2005-2010, the City of Calgary, November 2005.
table 5: employment by occupations (‘000) calgary economic region (unadjusted)
Description q1-06 q4-05 quarterly Change q1-05 annual Change
all Occupations 673.0 652.7 20.3 634.2 38.8Management 64.0 58.5 5.6 63.7 0.3Business, finance & administration 139.3 131.5 7.8 126.9 12.4Natural & applied sciences and related 68.7 76.7 (7.9) 63.3 5.5Health 39.6 40.3 (0.7) 37.2 2.4social science, education, Gov’t services 49.5 46.3 3.2 38.2 11.3art, Culture, recreation & sports 19.0 19.1 (0.1) 20.0 (1.0)sales & services 159.3 142.2 17.1 158.3 1.0trades, transport & equipment Operators 99.8 102.5 (2.7) 86.4 13.4Primary industry 14.2 15.9 (1.7) 14.7 (0.5)Processing, Manufacturing & utilities 19.6 19.8 (0.2) 25.5 (5.9)unclassified 0.0 0.0 0.0 0.0 0.0
source: statistics Canada & the City of Calgary - Corporate economics, april 2006
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financial marKet reVieW
prime Business loan ratethe Bank of Canada raised its target
rate, ...
On March 7, the Bank of Canada
raised its key policy rate - the target for
the overnight rate - by one quarter of
a percentage point to 3.0%, the fifth
increase in a six-month period. the
Bank stated that “some modest further
increase in the policy interest rate may
be required to keep aggregate supply
and demand in balance and inflation
on target over the medium term.”
in response to the Bank of Canada’s
action, the prime business loan rate
increased to 5.33% in the first quarter
of the year, from 4.0% the same time
last year (figure 5).
the u.s. federal reserve also raised
its target rate for the fifteenth consecu-
tive time to 4.0%, on March 28. the
Bank Committee “judges that some
further policy firming may be needed to
keep the risks to the attainment of both
sustainable economic growth and price
stability roughly in balance.”
exchange ratesthe Canadian dollar climbed to a
15-year high, but...
the Canadian dollar climbed to a
15-year high of 87 cents u.s. (figure 6)
in the first quarter of 2006. the dollar
is one of the major risks to economic
growth in 2006 and will probably exert
some restraint on activity for a while
longer, especially in manufacturing.
figure 8 shows the relationship be-
tween the Canadian dollar and crude
oil price.
inflation first Quarter 2006consumer price inflation remained
subdued.
year-over-year, consumer price
inflation stood at 3.6% (figure 7) in
the first quarter of 2006, up from
1.3% a year ago.
the inflation rate, as measured by
the 12-month-moving average of the
consumer price index increase, was
estimated at 2.4% (table 8) for the
first quarter of 2006. this rate is up
from 1.7% in the same time last year.
Prime Business Loan Rate(%)
Mar-02 Mar-03 Mar-04 Mar-05 Mar-062.00
2.50
3.00
3.50
4.00
4.50
5.00
5.50
(%)
Sources: Bank of Canada & Corporate Economics
Exchange Rate(US¢/Cdn$)
Mar-02 Mar-03 Mar-04 Mar-05 Mar-060.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
0.90
(US
¢/C
dn
$)Sources: Bank of Canada & Corporate Economics
Inflation(%)
Mar-02 Mar-03 Mar-04 Mar-05 Mar-060.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
(%)
Sources: Statistics Canada & Corporate Economics
6
table 8: consumer price index calgary, alberta, edmonton & calgary
Consumer Price index year-Over-year Change 12-Month Moving average
Description Mar-06 Dec-05 Mar-05 Mar-06 Dec-05 Mar-05 Mar-06 Dec-05 Mar-05
all-items Canada 128.9 128.3 125.9 2.4 2.3 2.1 2.3 2.2 2.0
all-items alberta 136.8 135.9 132.1 3.5 2.9 1.6 2.5 2.1 1.5
all-items edmonton 134.6 133.9 130.4 3.2 2.8 1.8 2.4 2.1 1.1
all-items Calgary 137.7 136.8 132.9 3.6 2.8 1.3 2.4 2.0 1.7
shelter 147.6 145.1 136.8 7.9 5.0 1.2 4.1 2.7 2.7
rented accommodation 127.1 126.7 125.6 1.2 1.0 0.1 0.8 0.5 0.3
Owned accommodation 140.6 134.0 127.4 10.3 5.5 2.6 5.0 3.4 3.1
Water, fuel and electricity 197.6 215.0 185.6 6.5 7.2 -0.7 4.7 3.6 4.8
source: statistics Canada & the City of Calgary - Corporate economics, april 2006
figure 5 figure 6 figure 7
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Building permits: the city of calgarythe value of building permits was
up, …
total building permits issued by the
City of Calgary totaled $1,190.2 million
(figure 8) for the first quarter of 2006,
up from $836.4 million the same time
last year, or by 42.3%, the highest value
in a quarter over the past five years.
Permits for residential units increased
to $623.2 million in the first quarter
from $385.4 the same time last year, or
by 61.7%. the value of non-residential
building permits shot up to $567.0
million the first quarter of the year, up
from $451.0 million the same time
last year, or by 25.7%. the continued
strength in the housing sector was sup-
ported by low mortgage rates and their
positive impact on affordability, and
a strong labour market. Calgary’s hot
labour market is expected to have
a positive impact on personal income
and therefore continued demand
for housing.
housing starts cma
housing starts were up, and …
total housing starts in the Calgary
Census Metropolitan area (CMa)
increased by 32.1% year-over-year
the first quarter in 2006 to 3,844 units
(figure 9) compared to 2,911 units
the same time last year. single-family
housing starts also increased by 39.8%
to 2,487 units from 1,779 units the first
quarter last year, while multi-family
units shot up 19.9% to 1,357 from
1,132 the same time last year.
calgary mls residential house salesthe resale market remained strong.
total residential units sold in the first
quarter of 2006 reached 8,965 units
(figure 10), up from 6,810 sold the
same time last year, or by 31.6%,
driven by low mortgage rates and
strong consumer confidence. this was
the second highest level of activity in
a quarter over the past five years. the
number of properties listed for sale
reached 10,160 properties, slightly
down from the 11,112 units listed the
first quarter in 2005. average resale
house price increased to $306,390, up
from the $244,040 reached the same
time last year, or by 25.6%.
Total Housing Starts(Calgary CMA)
Mar-02 Mar-03 Mar-04 Mar-05 Mar-060
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
(Un
its)
Sources: Calgary Mortgage and HousingCorporation & Corporate Economics
Mar-02 Mar-03 Mar-04 Mar-05 Mar-065,000
6,000
7,000
8,000
9,000
10,000
11,000
12,000
13,000
Un
its
So
ld, L
isti
ng
s(U
nits
)
$160,000
$200,000
$240,000
$280,000
$320,000
Averag
e Price
($)
Units SoldListingsSale Price
MLS ActivityCalgary
Sources: Calgary Real Estate Board &Corporate Economics
Total Value Building Permits(City of Calgary)
Mar-02 Mar-03 Mar-04 Mar-05 Mar-060.00
200.00
400.00
600.00
800.00
1000.00
1200.00
($m
illio
ns)
Sources: City of Calgary & Corporate Economics
figure 8 figure 9 figure 10
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8office real estate marketsCalgary’s strong economic performance in the first quarter of
2006 was responsible for continuing the growth trend in the
real estate market that was seen throughout 2005.
Calgary’s downtown office vacancy rate is 1.2%, the lowest
vacancy rate of all major cities in the world. the greatest
leasing activity occurred in class ‘B’ space due to the limited
supply of class ‘a’ space in the downtown core.
Net absorption in the downtown core was 276,168 sf,
which was less than half of net absorption in the last quarter
of 2005. the decrease in absorption is indicative of the
decreasing amount of vacancy in the downtown real estate
market, as well as the increasing lease rates, which hit an all
time high this quarter with the average net lease rate being
$34.85 psf for class ‘a’ space.
there are a number of large projects currently underway in
the downtown core including: the redevelopment of the old
aGt building, the Homburg-Harris Centre, Centrium Place,
Opus 8 and Phases i and ii of Livingston Place. there have
also been proposals for the construction of nine more office
towers, including ‘Banker’s Court’, ‘City Centre’ and ‘Centen-
nial Place’, which would add an additional 5 million sf to the
downtown core by 2010.
the activity in Calgary’s suburban market continued to be
strong in the first quarter of 2006, marked by a record low
vacancy rate of 5.6%. a large amount of the total absorption
of 271,011 sf can be attributed to the lease transactions of
revenue Canada, Colt engineering and the Calgary Health
region in the first quarter. there is a growing segment of
interested users in the suburban office market who are
looking for an alternative to the expensive downtown market.
from a transaction perspective, the office sector led all real
estate sectors in dollar volume activity in the first quarter of
2006 with 18 transactions representing a total of $320.9
million, which is an increase of 15% from the fourth quarter
of 2005.
industrial real estate marketsthe Calgary industrial market continued to thrive in the first
quarter of 2006 despite facing challenges of limited land
supply and speculation over future developments due to
increased construction costs and skilled labour shortages.
there were 588,100 sf of new building space completed
in the first quarter of 2006, with almost one million sf of
industrial space currently under construction. in total, there
were 1.73 million sf of industrial space absorbed in the first
quarter of 2006.
New owner-user industrial parks are being purchased within
relatively short time frames, with Kingsview Business Park
(Phase i and ii) and shepard Business Park (Phase ii) both
selling out this quarter. a large amount of current industrial
market activity is occurring in the southeastern and north-
eastern ends of the city, with major developments being
done by tonko, Verus Partners LLC, Bentall Development
Corporation and the Hopewell Development Corporation.
in total, there was $178.8 million in industrial market sales
in the first quarter of 2006, which was an increase of 152%
from the fourth quarter of 2005. the largest number of
industrial market sales transactions occurred in southeastern
Calgary this quarter with 18 transactions representing
$162.5 million dollars. the highest sale price in the first
quarter was $101.8 million for the Canadian tire
Distribution Centre.
table 9: calgary commercial real estate (office markets) Q1-2006
Downtown suburban
Vacancy rate 1.2% 5.6%
average Net rent (per sf)* $34.85 $14.97
ytD Net absorption (sf) 276,168 271,011
*average a space lease cost downtown and average all classes suburban
table 10: calgary commercial real estate (industrial markets) Q1-2006
Vacancy rate 1.6%
average Net rent (per sf)* $7.79
ytD Net absorption (sf) 1,727,032
*average all districts, 25,000 sf+
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9
Calgary’s economic growth has consistently outstripped the
growth of its labour force over the last five years. Calgary
economic Development has prepared a profile on Calgary’s
labour force in order to respond to the city’s labour shortage.
Key findings from this profile include:
groWth the Calgary economic region’s gross domestic product
is expected to grow by 3.7% in 2006 but will decline to
3.4% by 2008 due to slow population growth which will
constrain economic growth
Calgary’s employment growth will decrease to 2.2%
annually in the 2005-2010 period compared to the 4%
growth seen in the 1994-2004 period.
participation in 2005, 73.8% of Calgarians of working age participated
in the labour force, which is the highest participation rate
of Canada’s major centres. this is reflective of a trend
happening all across Canada.
Calgary’s unemployment rate was at a historic low of
3.9% in 2005, having dropped by 2.7% since 1996.
Groups who could participate more include women,
older workers, youth, aboriginal people, persons with
disabilities, immigrants and visible minorities. Women
and older workers represent the largest potential pool
of additional labour.
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occUpation anD income in Calgary, one is more likely to work full time and have a
higher income than anywhere else in Canada.
80.4% of jobs in Calgary are considered “white collar” jobs.
Occupations in sales and service, and business finance
and administration comprise the largest share of
employment in Calgary (44.2%) and grew more than
other occupations between 2000 and 2004, accounting
for almost half of all new jobs in Calgary in this period.
Oil and Gas incomes are 28% above average, while
wages in accommodation and food services are 42%
of the average hourly wage.
eDUcation anD training 61% of Calgary’s working age population has a post-
secondary credential, exceeding alberta, Canada,
edmonton and Vancouver.
in alberta, one in three students do not complete high
school within a three year period and one in four
students do not complete high school within five years
of beginning grade 10; Only 34% of alberta high school
graduates move on to post-secondary within four years
of graduation, and within six years of graduation only
50% of high school graduates have moved on to post-
secondary studies
Graduation from Calgary’s post-secondary institutions has
increased by 20% since 1999/2000
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special report: CaLGary LaBOur fOrCe PrOfiLe HiGHLiGHts
calgary’s total population, Working-age population,and labour force population change, 1996 to 2005 2005 2001 1996 10 year % Change
total Population 1,060,300 976,082 768,082 38.0%
Working-age Population 854,200 756,125 639,082 33.7%
Labour force Population 630,500 568,465 472,840 33.3%
Labour force Participation rate 73.8% 75.2% 74.0% -0.2%
source: statistics Canada, 2001 and 1996 Census of Population and 2005 Labour force survey
0 20 40 60 80 100
TOTAL
Females
Youth
55-64 Yearsof Age
Seniors
Persons withDisabilities
VisibleMinorities
Aboriginals
Immigrants
75.2
4.9
69.1
5.0
75.2
10.0
65.2
4.1
12.0
4.2
47.9
7.3
70.6
6.4
75.0
10.0
68.4
5.2
Participation RatesUnemployment Rates
2001 Calgary Labour Force Participation and UnemploymentRates by Seclected Demographic Groups
Percent
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10
alberta advanced education predicts that over the next
10 years, nearly 8 in 10 new jobs will require a post-
secondary education.
Campus Calgary, a partnership of Calgary’s five public
post-secondary institutions, identified that 19,700
additional full-time Learning equivalent spaces should be
created in the city over the next five years to meet demand.
as of february 2006, there were 12,343 registered
apprentices in Calgary – an increase of 20.7% since 2004.
Over 90% of alberta employers say they provide informal
or formal on-the-job training.
age Demographics Calgary’s labour force has the youngest age profile of
major Canadian centres; 24% of Calgary’s labour force
is between the ages of 25-34 compared to 21.8% of
albertans and 21.4% of Canadians as a whole.
9.9% of Calgary’s labour force is over 54 years of age
compared to 11.6% for alberta and 11.7% for Canada.
as the baby boomers age and workers delay retirement,
the labour force within the 45-54 year age group
continues to grow. Between 1995 and 2005, labour
force growth hovered around 20% among the less than
45-years age group, whereas it grew by 77.3% within
the 45-54 year age group, by 128.3% in the 55-64
year age group, and by 109.3% in the 65 years and
over age group.
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sUmmary: Demographic groUps in calgary’s laBoUr force
WomenCalgarian women make up almost half of the total labour
force (46.2%) however they only have a participation rate
of 69.1% in comparison to the men’s participation rate of
81.4%. the lower participation rate is for a variety of reasons
including women choosing to stay at home either part or
full-time in order to raise children and provide care for family
members. Women have the potential to create the largest
numerical impact in Calgary’s total labour force; if Calgary’s
participation rate for women was increased to 80% it would
result in 46,981 additional workers. in order to increase
the participation rate both firms and government will have
to work to be more flexible in regards to working hours and
child and family care options.
youththe youth component of the Calgary labour force grew at a
rate of 22.6% between 1995 and 2005 which was a much
lower growth rate compared to the total labour force growth
of 37.4%. youth unemployment was 10% in this same
period, a rate that is approximately double that of the 2001
Calgary labour force unemployment rate of 4.9%. Calgary’s
youth are more likely than youth elsewhere in the country to
work full-time and/or full-year, with 23.6% of Calgary’s youth
working full-time and/or full-year compared to the 19.7%
national average.
older WorkersOne in ten workers in Calgary is over the age of 54 years
and the proportion of workers between the ages of 45-65
has been growing over the past 10 years. there has been
an increasing number of workers that are choosing to delay
retirement, which has resulted in employment rates of those
aged 55 years and over increasing by 20% between 2001
and 2004. Calgarians between 55 and 64 are 54% more
likely to be working than other Canadians the same age.
there would be an additional 18,915 workers in Calgary’s
labour force if Calgary was able to retain 30% of those
people that are eligible to retire or re-engage already retired
people. Calgary will lose workers mainly in the sales and
service, business, finance, administration and management
sectors as older workers retire.
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11 persons with disabilitiesPersons with disabilities are those individuals 15 years and
older who have difficulties with daily activities and restrictions
in the amount or type of activity due to physical or mental
conditions or health problems. Persons with disabilities
make up 9.9% of Calgary’s labour force and have a labour
force participation rate of 47.9%. Over the past 10 years the
labour force participation rate for persons with disabilities
increased by 10% and the unemployment rate decreased by
4.5%, which was a significant gain for this group. Persons
with disabilities are more likely to be unemployed with a 7.3%
unemployment rate compared to the total population, with
an unemployment rate of 4.9%. Persons with disabilities
have notably lower levels of educational attainment compared
to the total Calgary population, with 35.1% having attained
less than high school education (compared to 16.7% of the
total population) and only 13.1% having completed a
university degree (compared to 29% of the total population).
One in three persons with disabilities has attained a post-
secondary diploma/certificate indicating that college or tech-
nical institutes may be more accessible than universities.
Visible minoritiesCalgary’s visible minority individuals make up 5.6% of the
total labour force. Compared to the total population, the
visible minority population has a slightly lower labour force
participation rate of 70.6% and a slightly higher unemploy-
ment rate of 6.4%. fifteen-point-eight per cent of the visible
minority population work in the manufacturing sector.
this indicates that they are nearly twice as likely to work
in this sector than the total labour force, where only 8.8%
of individuals are employed in manufacturing. Visible
minorities are also less than half as likely to hold jobs in
construction (3.6% compared to 7.2% of the total labour
force). Visible minorities are nearly twice as likely as the total
labour force to work in accommodation and food services
(12.6% compared to 6.9% of the total labour force). a
greater proportion of visible minority individuals have
obtained university degrees (23.5%) than any of the other
sub-groups mentioned.
aboriginal peopleCalgary has the fourth highest urban population of aboriginal
people in the country with 21,915 aboriginals living in the
city. the aboriginal population has the same labour force
participation rate as the total population, however the
unemployment rate of the aboriginal population is 10.1%,
which is more than double the overall unemployment rate of
4.9%. the employment figures of the aboriginal population
have become more favourable over time with a five-year
increase in labour force participation by 5.4% and a five-year
decline in unemployment rate by 4.2%. aboriginal people
are nearly twice as likely to be working in trades, transport
and equipment operation with 23.5% of the aboriginal
labour force employed in this sector compared to 13.4% of
the total working population. Calgary’s aboriginal population
has also made gains in attaining high school level education
and 28% have a diploma/certificate. While only 7.0% of
Calgary’s aboriginal population have attained a university
degree, this rate is higher than the 5% of aboriginal
individuals province-wide with degrees.
immigrantsCalgary is the fourth most common destination for immigrants
and is the first choice location for “second” moves within
Canada. the immigrant labour force participation rate is
68.4% which is lower than the 75.2% participation rate of
the total Calgary population. in comparison to other Canadian
CMa’s, Calgary tends to attract immigrants who are more
educated, more likely to have worked previously and more
likely to find work within one year of arrival compared to
other locations in Canada. seventy-four per cent of immigrants
were in the skilled worker category and nearly two-thirds
(65%) were age 25 to 44 and had a university education.
Despite high qualifications, up to one-half of employed
immigrants who come to alberta with post-secondary
credentials are not fully utilizing their skills and experience
in their jobs due to language barriers and a lack of credential
recognition by various professional associations.
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12maJor capital proJects
in april 2006, alberta economic Development estimated that $14.7 billion (table 11) in major capital projects are either
planned or underway in Calgary. Nearly one third (30.7%) of these projects are in infrastructure, followed by institutional
investments (28.3%) and commercial & retail (21.4%). the Calgary airport authority renovation project leads the way
with an estimated investment of $850 million, followed by the proposed tom Baker Cancer Centre building ($600 mln),
the Calgary Health region proposed south Health Campus ($550 mln) and the enCana Corp. office towers ($540 mln)
(table 12).
table 11: calgary major capital projects
Project sector # of Projects Cost in $ Millions % Distribution
agriculture & related 2 $21.9 0.1%Chemicals & Petrochemicals Commercial/retail 47 $3,142.7 21.4%Commercial/retail and residential 1 $400.0 2.7%forestry & related infrastructure 82 $4,505.5 30.7%institutional 48 $4,151.9 28.3%Manufacturing Mining Oil & Gas Oil sands Other industrial 4 $64.6 0.4%Pipelines Power 2 $302.5 2.1%residential 29 $1,024.9 7.0%tourism/recreation 27 $1,065.7 7.3%total 242 $14,679.7 100.0%
source: alberta economic Development, april 2006
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13table 12: calgary major projects $100 million and abovecompany name project Description Value of projects Sector construction comments (millions) Schedule
enCana Office tower Complex (two towers) $540.00 Commercial 2006-2008 announced. Price includes land purchase.
Heritage Partners Deerfoot Meadows retail Complex $500.00 Commercial 2003-2007 under construction. Graham Construction.
Big-box retail outlets plus possible hotel.
Matco investments Ltd. Office and retail Complex $450.00 Commercial Proposed.
Oxford Properties Centennial Place Office tower $400.00 Commercial Proposed for 2006-2008.
plus second Office tower
Homburg-Centron Homburg-Harris Centre Office Building $280.00 Commercial 2005-2007 under construction.
teamworks Phase 1 trident tower and Phase 2
King street Capital Palliser square two and three $220.00 Commercial Proposed for either side Calgary tower.
Partners Office and towers (2)
Bentall real estate Livingston Place Office towers $130.00 Commercial 2005-2007 under construction. ellis Don Construction.
services Phase 1
Homburg-Centron Centron Park Office Complex $121.00 Commercial Proposed.
teamworks (7 Buildings)
Bentall real estate Livingston Place Office towers $120.00 Commercial 2005-2007 under construction. ellis Don Construction.
services Phase 2
WaM Development/ stampede station retail/Office space $400.00 Commercial/ 2004-2007 under construction.
Opus Building Corp. Hotel and residential Buildings retail
Calgary airport authority airport improvements $850.00 infrastructure 1998-2007 under construction.
City of Calgary/tsuu 37 st sW extension from sarcee tr. $300.00 infrastructure Proposed.
t’ina first Nation to Highway 22X
alberta infrastructure extension of stoney trail to Deerfoot $250.00 infrastructure 2005-2007 under construction.
and transportation trail
City of Calgary Lrt extension NW to Crowfoot $183.00 infrastructure Proposed for 2006-2008.
Centre & Widening of Crowchild
trail to six Lanes
City of Calgary Oliver Bowen LrV Maintenance $141.70 infrastructure 2006-2008 announced.
facility (Ne)
City of Calgary Glenmore Water treatment Plant $128.20 infrastructure 2004-2008 under construction. PCL Construction
upgrades Management.
tom Baker Cancer Centre replacement Building $600.00 institutional Proposed. Pending government approval.
Calgary Health region Hospital for south Calgary $550.00 institutional 2007-2010 announced. ellisDon Construction. site preparation
(south Health Campus Phase 1) in 2006. Kasian architecture/HDr inc.
GWL realty advisors Calgary Courts Centre Courthouse $300.00 institutional 2004-2007 under construction. Cana Management.
Complex
Calgary Health region re-development of foothills Medical $265.00 institutional 2004-2009 under construction. ellis-Don Construction.
Centre includes upgrading & expansion of intensive
care unit & emergency dept. plus building addition.
alberta Children’s alberta Children Hospital $220.00 institutional 2003-2006 under construction. ellis-Don Construction.
Hospital foundation/
Calgary Health region
Calgary Health region Peter Lougheed Hospital expansion $200.00 institutional 2005-2008 under construction. stuart Olson.
Phase 2
the university of Calgary New Campus, east Village $200.00 institutional Proposed.
the university of Calgary institute for sustainable energy, $200.00 institutional Proposed.
environment & economy (iseee)
Calgary Health region rockyview Hospital addition and $193.00 institutional 2005-2008 under construction (Phase 1). Cana Construction.
Parkade
City of Calgary New Downtown Library $150.00 institutional Proposed.
the university of Calgary experiential Learning Centre $150.00 institutional Proposed.
Bow Valley College Campus re-development and $133.00 institutional 2006-2010 announced. stuart Olson Constructors. Phase 1 to
expansion be completed by 2008, Phase 2 by 2010.
the university of Calgary Veterinary school $130.00 institutional 2006-2007 announced.
Calgary Health region Joint injury treatment and research $125.00 institutional Proposed. Planned completion by 2009.
Centre
the university of Calgary Digital Library $113.00 institutional Proposed for 2006-2008. Planned construction
starts spring 2006.
southern alberta institute trades and technology Complex $107.00 institutional Proposed.
of technology (sait)
alberta electric system New transmission Line (500kV) $300.00 Power Proposed for 2007-2009
Operator (aesO) Genesee to Langdon
Point of View Development riverfront Pointe Highrise towers (4) $200.00 residential 2006 Proposed. to be developed in four phases.
Planned construction start spring 2006
Westcorp inc. London at Heritage station $200.00 residential Proposed. to be built in four stages. Planned
Condominium towers construction start stage 1 early 2006.
Homburg-Centron two residential towers $130.00 residential Proposed. Planned construction start late 2006.
teamworks
Calgary exhibition and facility expansion Phase 1 $200.00 tourism/ Proposed. Planned construction start of casino
stampede recreation re-location april 2006. Complex will eventually
include expanded roundup Centre and proposed
resort hotel.
Calgary Olympic Canada Olympic Park facility $200.00 tourism/ Proposed.
Development association expansion recreation
Calgary Olympic facility upgrades/revitalization $150.00 tourism/ Proposed.
Development association recreation
Calgary science Centre New telus World of science Calgary $100.00 tourism/ Proposed completion by 2010. Location near
science Centre recreation Calgary Zoo.
Calgary Zoo arctic shores & antarctic Landing $100.00 tourism/ Proposed.
arctic/antarctic exhibit recreation
source: alberta economic Development, January 2006
soUrces:
alberta economic Development
Bank of Canada
Bank of Montreal financial Group
BMO Nesbitt Burns
Calgary real-estate Board Co-operative Ltd
Canada Mortgage and Housing Corporation
Canadian Natural Gas Daily News
CBre alberta research Group
CiBC World Markets
federal reserve Bank of Chicago
federal reserve Bank of st. Louis
GLJ Publications inc.
international energy agency
Oilweek
rBC financial
realNet Canada inc.
scotia economics
statistics Canada
the City of Calgary, Development & Building approvals Department
the Conference Board of Canada
toronto Dominion Bank financial Group
u.s. energy information administration
the City of Calgary, Corporate economics, Calgary economic Model
ceD serVices:
Calgary economic Development (CeD) is Calgary’s lead economic development agency, marketing the Calgary region’s competitive advantages, pro-business climate and superior lifestyle around the world. We provide services in:
Business Development and retention
supporting existing business
Labour force development
trade development
Business and investment attraction
Commercial site selection assistance
Location scouting assistance for film production
information services
regional economic data
research
Calgary Business information Centre
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contacts:
adam Legge
Calgary economic Development
Phone: 403-221-7892
or toll free: 1-888-222-5855
adam@calgaryeconomicdevelopment.com
www.calgaryeconomicdevelopment.com
Patrick Walters
the City of Calgary
Phone: 403-268-1335
patrick.walters@calgary.ca
www.calgary.ca/economy
Jocelyn Burgener
Calgary Chamber of Commerce
Phone: 403-750-0406
jburgener@calgarychamber.com
for additional copies contact:
info@calgaryeconomicdevelopment.com
Phone: 403-221-7831
Copyright 2006. Printed May 2006.
the City of Calgary, Calgary economic Development provide this information in good faith. However, the aforementioned organizations make no representation,
warranty or condition, statutory express or implied, take no responsibility for any errors and omissions which may be contained herein and accept no liability for
any loss arising from any use or reliance on this report.
731 – 1st Street S.e.
calgary, alberta
canada
t2g 2g9
phone: 403-221-7831
or toll-free: 1-888-222-5855
Fax: 403-221-7828
email: info@calgaryeconomicdevelopment.com
www.calgaryeconomicdevelopment.com
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