Well hello again my friends. It has been a few months since I have written a blog post. Business concerns have taken up a lot of my time for the last 5 months but things should be easing back to normal and I can now bore you to tears again with my favorite subject…economics!!
And what better way to get back into the swing of things than with some positive economic indicators – but first a Battle of Alberta, Edmonton vs Calgary, on Consumer Price Index.
Consumer Price Index
I guess depending upon how you look at it, both Calgary and Edmonton can claim victory on this one. Alberta’s overall CPI in February was 2.4% while Edmonton’s dropped from 2.2 to 1.9% and Calgary’s stood at a whopping 2.9%.
Lower gasoline costs and moderately higher accommodation costs helped keep Edmonton’s inflation rate down but a tightening residential vacancy rate will likely drive rents higher in the near future. Price increases in other components may drive Edmonton’s CPI as high as 2.5% in the coming months.
New home construction has been slower in Edmonton for a few months but picked up in February with 363 single-detached starts, up 25% from January and 32% from February 2013. Continuing gains in employment and in-migration, coupled with low mortgage rates have been supporting the growth.
The working-age population and participation in the labour force have both been increasing as of late, contributing to a higher number of job seekers in Edmonton. This growth in employment has helped boost Edmonton’s wages by 4% over the last year. This should contribute to increased spending in housing, clothing, automobiles and appliances.
The growth in labour force statistics have been service oriented, pointing to a move away from construction and manufacturing and toward services. Edmonton has had a labour shortage as of late and these increasing numbers are a reflection of that, as more workers help to address the shortage.
Residential Construction Permits at Highest Level in Decades
Needless to say, all this activity has resulted in Edmonton’s residential building permits posting one of the highest monthly gains in Canada, along with Toronto and Vancouver (not Calgary J). Residential permits in January 2014 came in at just a tad under $400 million with all permits (residential and non-residential) reaching $523, a 34% increase over December and a 39% increase from January of 2013.
Needless to say, 2014 is expected to be another good year in the Edmonton area. It’s nice when the good news just keeps on coming, isn’t it?