While Edmonton has fared a bit better than other parts of Alberta since the downturn began in late 2014, the city hasn’t been completely immune to the slowdown, with thousands of people losing their jobs. The unemployment rate now sits at 6.8 per cent.
The City of Edmonton’s chief economist John Rose said up until about May of this year, employment in the city and the overall economy was growing.
“That reflects the fact that our economy is much more diverse than the rest of Alberta and in particular Calgary, where you saw a quite immediate downturn in 2014 as soon as oil prices started to fall,” Rose said.
The job losses over the spring, summer and fall came largely in construction, manufacturing and professional services, according to Rose.
So what should Edmonton expect in 2017? Here’s a breakdown.
While Rose anticipates growth in Edmonton in 2017, he warned that it will be modest and people will need to be patient. He believes there will be more job opportunities in Edmonton next year but cautioned that it will likely result in a slight increase in unemployment, as the job opportunities will bring people back into the labour force.
“As soon as we start to see a turnaround in employment opportunities, as soon as the number of jobs begins to improve, I think many of those people are going to come back into the labour force and that will result in the labour force growing more quickly than employment,” he explained.
“Our unemployment rate will probably move up well above seven per cent unfortunately, probably in the range of 7.5 per cent, as we get into the first half of 2017.”
With Edmonton’s unemployment rate much lower than the rest of Alberta and Canada, job seekers have made their way to the Capital Region over the years for work.
With the rush in population came a high demand for housing, particularly for rentals and multi-family townhouses and row houses, Rose said.
However, as soon as the unemployment rate went up, the demand for rental units came down.
“What you’ve seen with the housing starts is a very sharp collapse in multi-family housing starts, particularly housing starts related to the rental sector of the economy,” Rose said.
Like job opportunities, Rose said this should turn around but it likely won’t happen until 2018.
“2017 is going to continue to be a difficult year for the construction sector, both residential and non-residential. It’s going to be a slow year,” he said.
Increased spending and good news into 2018
With the economy beginning to stabilize, Rose said Albertans have started to spend money again.
A recent string of infrastructure announcements is also welcome news to Rose, who said the projects will bring with them employment opportunities in the years to come.
“With the approval of the two pipelines, as well as the announcement of petro chemical plants in Sturgeon County and Strathcona County, those bode very well for the non-residential construction side of Edmonton’s economy,” he explained.
And while the Yellowhead Trail upgrade project won’t start for a few years yet, Rose said Edmonton will see an impact on engineering and design services right away.