Economy in Alberta

[tenyardrambo]

Is it me or is the economy improving a lot in Alberta. In Calgary there are many opportunities to gain employment. Yet I am noticing through contacts I have that the people who came from the East(Ontario-Martimes) in the mid 2000s are moving back to their home provinces.
The Calgary Herald reported last week that the city grew in population significantly and stated the unemployment rate was around 5%(4.9).
http://blogs.calgaryherald.com/2012/...ployment-rate/

But one thing that doesn't make any sense is that if Calgary is growing who is coming into Calgary? Is it for just for the Energy Sector? Are these people coming bringing in their own company who will need to hire workers?
Is it entry level workers just looking for a job?

I am not an economist but if something similar like 2005-2007 is close to happening I hope people treat it with respect and not over spend and try to invest, while gaining a trade that will be desperately needed in the near future.

[Brotato]

70% of the Western Canadian Sedimentary Basin is gas. 2005-20007 won't be back for a long time, if ever.

This is still very much a 'gassy' town, and NG focused companies are in tread water mode, not 'hire like it's going out of style' mode. The only thing keeping this city moving forward, energy-wise, are the handful of companies in town that had the foresight to focus on oil post 2007.

[fredr123]

The vacancy rate around here seems to suggest things are picking up. The lease is up for our office down town. We currently sublet from an O&G company who is expanding and decided they needed to take our space back. We started looking last fall and it was slim pickins all over the core. You want an entire floor of decent office space? Even with all the new construction coming online, be prepared to pay a lot more than you would have expected.

[macker]

Seems to be a lot of employee to contractor conversions going on lately. This isn't always looked upon as a good thing/sign....Ok for now though...

[wookster]

I would say it is a lot more than a handful of companies, most companies are investing and purchasing land rights in the US and places like North Dakota are basically becoming the new Fort Mac for the US. I also read that oil sands investments are to set a new record this year at just above 3 billion to be spend on projects. Land sales in Alberta broke a record last year as well and opened this year very strong as well. Our company is hiring an average of 5 - 10 people a week now for months and we are small compared to the big companies (and do not have any projects in the oilsands), we are about 50-50 for oil vs. gas production.

While I would agree that things are going at a more cautious approach than they did in 05-06...I wouldn't say they are in a tread water mode either...things are definitely going forward and will continue as long as the price of oil stays around the $100 mark.

Growth in Calgary would be contributed to the energy sector, but with growth in the energy sector, jobs will filter out from that to other sectors that provide goods and services to the energy sector as well.

[macker]

With the glut of natural gas in the US and the renewed focus on nuclear etc these are not good signs for the medium term I wouldn't think. Also heard today that the cost of solar has really come down and may even be at an all time low so will likely shift things around to some degree also. The desire is for things to be like they were a few years ago but the demand isn't keeping pace....

[Kybosh]

I'm not an economist or deal in commodities, but I wouldn't be surprised if natural gas stays steady for the next 10-15 years.

Also, alternative energy sources (nuclear, solar etc.) will play increasing roles but natural gas and light to heavy hydrocarbons will still be have huge roles as feed stocks for our manufacturing economy. This already happens, but look for new technologies that will use the glut of natural gas to transform it into other materials. From a geological perspective, I wonder if we can almost get to the point where natural gas becomes a sustainable resource in the future?

[J pold]

Originally Posted by fredr123

The vacancy rate around here seems to suggest things are picking up. The lease is up for our office down town. We currently sublet from an O&G company who is expanding and decided they needed to take our space back. We started looking last fall and it was slim pickins all over the core. You want an entire floor of decent office space? Even with all the new construction coming online, be prepared to pay a lot more than you would have expected.

This. I’ve recently started working with a commercial real estate brokerage and everyone is saying the same thing – vacancy rates are dropping fast and there just isn’t enough space to meet demand. Since the start of 2012 landlords have been jacking up rates and if you’re looking for space you better expand your budget. There is a theory that commercial real estate vacancy levels are a indicator for economic growth, if that is the case Calgary is on the verge of a boom.

[tenyardrambo]

Originally Posted by J pold

This. I’ve recently started working with a commercial real estate brokerage and everyone is saying the same thing – vacancy rates are dropping fast and there just isn’t enough space to meet demand. Since the start of 2012 landlords have been jacking up rates and if you’re looking for space you better expand your budget. There is a theory that commercial real estate vacancy levels are a indicator for economic growth, if that is the case Calgary is on the verge of a boom.

Ive been noticing a lot of huge holes in the ground for commercial buildings.
Also around the older Calgary areas investment groups are buying up the older homes in blocks so they can build either condos or bigger homes but smaller lots.

[Lt.Spears]

Originally Posted by Brotato

70% of the Western Canadian Sedimentary Basin is gas. 2005-20007 won't be back for a long time, if ever.

This is still very much a 'gassy' town, and NG focused companies are in tread water mode, not 'hire like it's going out of style' mode. The only thing keeping this city moving forward, energy-wise, are the handful of companies in town that had the foresight to focus on oil post 2007.

Now is a good time to buy gas assets if you have the bank to support it for a couple years.

[Brotato]

Originally Posted by Lt.Spears

Now is a good time to buy gas assets if you have the bank to support it for a couple years.

I disagree. I believe natural gas is done for as a growth commodity, long term, at least in our lifetimes. While the pipelines previously mentioned will help in the medium term, long term the USA already has a good 200 years supply of NG found, and China has the worlds biggest shale gas reserves... That they haven't even touched!

That's part of the reason, IMO, why the Chinese bought Daylight. They are after our shale/hz drilling techniques. Once they can drill it themselves that pipeline will be useless.

Long term I am not bullish on gas at all

My view:

ST (1-2 yrs): Gas = death
MT (2-10 yrs): gas = maybe decent with intercontinental / asia pipelines
LT (10+ yrs): gas = death once again, as the asians begin to be self-supporting with respect to their massive shale NG reserves.

[Cowperson]

Originally Posted by Brotato

I disagree. I believe natural gas is done for as a growth commodity, long term, at least in our lifetimes. While the pipelines previously mentioned will help in the medium term, long term the USA already has a good 200 years supply of NG found, and China has the worlds biggest shale gas reserves... That they haven't even touched!

That's part of the reason, IMO, why the Chinese bought Daylight. They are after our shale/hz drilling techniques. Once they can drill it themselves that pipeline will be useless.

Long term I am not bullish on gas at all

My view:

ST (1-2 yrs): Gas = death
MT (2-10 yrs): gas = maybe decent with intercontinental / asia pipelines
LT (10+ yrs): gas = death once again, as the asians begin to be self-supporting with respect to their massive shale NG reserves.

I agree. Natural gas is toast for a long time.

It has the same atmosphere of the early 80's to early 90's when Jim Gray of Canadian Hunter would travel everywhere and anywhere giving speeches about how natural gas prices, trapped under a bubble, would be soaring in the next year . . . . . and, finally, after a decade, he was right.

But it took a decade.

There are still a lot of hopeful Jim Gray's in Calgary right now.

Cowperson

[tenyardrambo]

Originally Posted by Cowperson

I agree. Natural gas is toast for a long time.

It has the same atmosphere of the early 80's to early 90's when Jim Gray of Canadian Hunter would travel everywhere and anywhere giving speeches about how a prices would be soaring in the next year . . . . . and, finally, after a decade, he was right.

But it took a decade.

There are still a lot of hopeful Jim Gray's in Calgary right now.

Cowperson

What would happen if majority of the vehicles ran on natural gas? In Canada that is..

[darklord700]

Originally Posted by Brotato

I disagree. I believe natural gas is done for as a growth commodity, long term, at least in our lifetimes.

While I don't disagree with this assertion, one thing I learned from the oil patch is that nothing is predictable. Just like nobody 10 years ago predicted the oil sand gold rush we are see now nor the glut of natural gas from the horizontal drilling that plummet the gas prices.

[wookster]

I agree natural gas won't experience another "boom" so to speak in terms of prices but I don't think it will die. As the US and other countries switch from Coal as their #1 fuel for manufacturing to alternative, I think ng will see a bit more demand. It is cheaper to convert to than other forms of "clean" energy like solar and wind. Burns a lot cleaner than coal as well so there is some good there as well. I think it will be a serious buffer to be used instead of things like coal until technology exists that make cleaner forms of energy more affordable and efficient. I seriously don't think that will be for quite a few years.