The Conference Board of Canada paints a dire picture for Calgary the rest of this year.
It says the sharp drop in oil prices will cause the economy to shrink by 1.2 per cent.
A survey of Metropolitan Cities says the city’s resource, agriculture and utilities sectors, are set to shrink by 2.3 per cent.
“Among the 13 cities surveyed, Calgary will have the worst-performing metropolitan economy this year,” said Alan Arcand, Director of the Centre for Municipal Studies with the Conference Board.
Toronto, Vancouver, and Halifax will be the fastest growing metropolitan economies in the country this year, with each posting gains of 3.1 per cent.
The Conference Board predicts employment in the Calgary energy sector will dip by 8.1 per cent this year and housing starts are expected to fall by over 30 per cent, as net migration slows and job growth weakens.
Calgary Economic Development says it doesn’t disagree with some of the numbers, but there are still positives.
Vice President of Marketing & Research, Mary Moran, says Calgary still has the lowest unemployment in the country and there is still growth in non-oil and gas industries.
“Although we’re shedding jobs in one sector, we’re actually gaining jobs dramatically in other sectors,” Moran said. “We saw a 46 per cent increase in employment in transportation and logistics year over year last month.”
She also pointed out a 1.5 per cent decrease in GDP growth is far below the 3.2% contraction in the economy, which Calgary experienced between 2008 and 2010.
The President of the Calgary Chamber of Commerce agreed.
Adam Legge said smaller businesses like retail, restaurants, manufacturing and artistic creative industries are still seeing demand for their products.
“Those industries seem to be a bit more insulated from low energy prices in a recession scenario; the question is will they experience it a bit later, or are they not going to experience it?” Legge said.
“Only time will tell.”
He doesn’t think a survey like this will drive business away from Calgary.
“I think the entire Alberta situation with respect to energy prices and where they are now is a larger driver of investment decision,” Legge said.
The Conference Board survey says Calgary’s economy will begin to rebound next year, at a modest 1.5 per cent.
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