Experts think 2016 will bring positive things to Calgarians despite oil slump
With all the negative buzz surrounding the economic situation in the city today, it is becoming increasingly difficult for Calgarians to see an upside to the downturn. However, experts say that there are several positive elements, and economic growth is expected in 2016.
Sarah Hawitt, partner at Blu Era, an executive headhunting company in Calgary, says that there is no more “fat to trim” in the energy sector.
“There are companies that are into their fifth, sixth, seventh round of layoffs now. A lot of people have been keeping a good face on it for a while, but you know, it’s bad,” she says.
For Calgary, 2015 was a difficult year. The Conference Board of Canada predicted that the city’s GDP shrank 0.5 per cent the past year. However, it is the organization’s forecast that the city GDP will grow 1.5 per cent in 2016 – still a long shot from 2014 when Calgary had the best performance in the nation with a 5.1 per cent growth
“Calgary is a very cyclical market, but every time we have come out of one of these cycles, we’ve emerged stronger than we have previously.” Susan Thompson
“We know that we are still in a bit of challenging year ahead,” says Susan Thompson, research manager at Calgary Economic Development. “Most people think that we haven’t quite hit bottom yet, but we don’t have as far to go as we have already been through.”
Thompson says that although job loss in the energy sector is huge, Calgary is actually net positive for job gains for 2015. Areas such as health care, information culture, recreation, accommodation, and food services are all continuing to see job growth in today’s market, she adds.
“It’s just because those energy sector job losses dominate the headlines, people aren’t necessarily hearing about the little bits of job gains that are happening elsewhere that add up,” says Thompson.
While there might still be a little way to go before seeing economic recovery, Thompson says that there are positives arising from the current situation.
“We’re seeing a large uptick in post-secondary institutions for people trying to upgrade their skills, so when they do go back to the workforce they are even more employable,” says Thompson.
Hawitt also acknowledges that more people are upgrading their education, which she says is a necessity in today’s workforce.
“I think an undergraduate degree today is like a high school diploma was in generations before. It’s the entry,” Hawitt says. “You’re seeing a lot of people in the business sector with more advanced education.”
Another positive factor in wake of the downturn is businesses starting to take advantage of low-rent office spaces. Currently vacancy for downtown office space is sitting between 14 and 15 per cent according to Thompson– more than double the rate in Jan. 2014 before the oil crash according to Avison Young Real State.
“A lot of people get caught up on, ‘Oh my gosh housing prices have gone down and the vacancy rates in office spaces have gone up.’ Well, we sit there and go, that actually means that businesses have the opportunity to move in and the rent’s gone down,” says Thompson.
In addition to more education, and lower rent for businesses, Thompson says that the downturn is promoting the economy to diversify into other sectors.
“Calgary has been developing, we’re no longer this one trick pony,” says Thompson.
Thompson says that some of the big areas that they expect to see development from are agribusiness and the film and television industry.
“Calgary is a very cyclical market,” Thompson says. “But every time we have come out of one of these cycles, we’ve emerged stronger than we have previously.”
Thumbnail courtesy of Doug Zwick/Flickr under Creative Common Lisence
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