Where Is The Economy Heading?

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I’m trying to post more consistently on Thursday’s these days as it is usually a quieter time for me. Also, if you haven’t noticed, I am starting to include an audio version of the posts. You can find it at the top of the post, just click on the little arrow beside the speaker icon. If this sentence is still here, I haven’t finished editing the audio  yet,so check back later!

I’m seeing plenty of interesting topics starting to show up in the news and  in the markets right now, so today is just a quick recap. Let’s start locally first.

I really enjoy talking to many of my tenants and acquaintances, as I get “the dirt” on what is happening in the economy much sooner than the news and government agencies can report it. What we saw through much of September, was many of our short term accommodations were significantly ramping up in demand.

Vacancies were quite low and the people coming to Calgary were pretty excited about the opportunities out here. It was on several occasions that the tenants even commented on how busy it was out here compared to the locations they came from. This was in stark contrast to the news that came out at the end of September talking about all the layoffs at Haworth, Suncor and everywhere else.

Couple this with the news reports that Alberta was going to be coming out of the recession slower than other provinces and no wonder our vacancies started to jump in October. I had talked in a previous post about how the media manipulated the public conscience and here it was happening. It’s as if people quit heading here over night. Once again, though, other than one fellow who returned to BC, all the other tenants were talking about the jobs that were available here.

They were getting steady work and able to move into locations that are more permanent which is great for them, less great for me though as the funnel wasn’t getting filled on the other end. So much for a slow recovery, or perhaps things never were that bad here?

On conversations in the last couple of weeks with people there is even more work ramping up, one company supplying piping to the oil industry has seen orders increase threefold in the last month and has had to rehire laid off workers. Some of the folks working downtown are churning out new projects that are starting to get ready to scale up and oil is currently at $75 a barrel (offset by a 97 cent dollar mind you, but still better than $60 oil). Also talking with some of the Union people I deal with there are more projects starting in the near future, which also bodes well for the workers.

On the Real Estate side, sales are still very consistent, the average resale price is down about $8,000, but the median price is up $2,000. So that indicates Real Estate is staying quite stable, with the dollar rising against the US, perhaps there is some extra pressure on potential buyers to buy now in case mortgage rates move up earlier than expected? Will this spur sales to increase during a time of year when they typically decrease? Only time will tell.

What are you seeing out there? Are you buying into the news, or seeing some positives? Were you part of the shoppers who hit the Cross Iron Mills, or were you to busy sitting at home talking about the woeful economy? Are you from outside of Alberta reading this and wondering how to get out here? I’d love to see some comments on this topic.