first quarter 2006 in this issue - s3.amazonaws.coms3.amazonaws.com/zanran_storage/ quarter 2006...

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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)


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


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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)


table 7: Unemployment rate by age (%) calgary economic region


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


3Calgary & region socio-economic Outlook 2005-2010, the City of Calgary, November 2005.

table 5: employment by occupations (‘000) calgary economic region (unadjusted)


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


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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(%)


2.50

3.00

3.50

4.00

4.50

5.00

5.50

(%)

Sources: Bank of Canada & Corporate Economics

Exchange Rate(US¢/Cdn$)


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(%)


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


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)


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

[email protected]

www.calgaryeconomicdevelopment.com

Patrick Walters

the City of Calgary

Phone: 403-268-1335

[email protected]

www.calgary.ca/economy

Jocelyn Burgener

Calgary Chamber of Commerce

Phone: 403-750-0406

[email protected]

for additional copies contact:

[email protected]

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: [email protected]

www.calgaryeconomicdevelopment.com

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