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ECONOMY: Calgary’s GDP to grow 3.3% to 3.8% next year, unemployment at 3% to 3.3%
        (AlbertaIndex, December 4, Tuesday) --- Despite a general slowdown, Calgary’s real GDP is seen to grow by a creditable 3.3% to 3.8% rate next year while unemployment will stay low at 3% to 3.3% as labour supply continues to be tight.
        In a joint report, Calgary Economic Development and TD Bank Financial presented a generally rosy picture for Alberta’s largest city over the next 12 months.

“Calgary’s economy should continue its slower growth trend off the peak in 2006, to a more sustainable level, a level of economic growth slower than 2007, yet one that is very healthy, and the envy and desire of any city around the world,” said the report.

Given the slowing trend, uncertainty around natural gas prices, and an unclear picture of the US economy, the report said Calgary’s real GDP is forecast to grow by 3.3% to 3.8% in 2008.

It predicts that the city’s higher housing costs and limited rental housing will discourage in-migration and slow population growth to between 22,000 and 25,000 next year.

The report predicts inflation to moderate to 3% to 3.5%, thanks largely to slower escalation of housing prices.

“Housing market fundamentals remain healthy and in place, however slowing in-migration and the plethora of listings should bring housing starts in at 13,500 – 14,000 in 2008,” it said. Strong employment growth and relatively low financing cost are expected to keep the housing market healthy.

Continued high demand for labour will bring employment growth in at between 2.5% and 3%, while keeping unemployment at a low rate of between 3% and 3.3%.

For workers, this is good news as Alberta’s average weekly earnings rose by 4.3% in the second quarter and is estimated to have increased by 4.6% in the third quarter. With labour in scarce supply, the report said wages and salaries will continue to face upward pressure, attracting migrants from other parts of Canada and abroad.

Calgary’s employment growth is currently running above the five-year average, fuelling the demand for housing and consumer products.

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