Gone is Alberta’s jack rabbit economy – in 2009 it looked more like a turtle crawling backwards.
But that turtle has a grin on its face, says an Alberta economist.
Todd Hirsch, senior economist at ATB Financial, said despite the recession, a more balanced job market, a stable housing market, and rebounding oil prices are working in Alberta’s favour.
“Despite the fact we’re in this nasty recession, people from other provinces, on a net basis, are moving to Alberta. They are still trickling in. That’s good news for the housing market. It’s good news for business and personal services,” said Hirsch in his presentation to members of Central Alberta Rural Manufacturers at Red Deer Lodge on Wednesday night.
Alberta may have an unemployment rate of 7.1 per cent, but if provincial migration is taken out of the equation, the unemployment rate would only be six per cent, not far from five per cent which is considered a balanced job market, he said.
“At three percent, it’s too tight. Employers have to trick people to coming to work for them” said Hirsch, recalling how during Alberta’s recent boom he heard about an oil company giving rig workers a bonus if they showed up to work for five days in a row.
“I don’t want to sound glib for people who are without work at the moment because that is miserable, but the overall job market in Alberta is not that bad.”
Red Deer’s manufacturing sector is in a “soft spot” right now, but Hirsch is optimistic there will be slow growth in 2010.
“A lot of the manufacturing in Central Alberta feeds into that conventional drilling activity. When gas prices are low, drilling is down. When drilling is down, there’s not as much need for all the fabricated materials that go into it.”
But manufacturers in Red Deer are small enough to adapt and take on different lines of production, even though diversity never seems to stick when oil and gas prices soar.
“We always want to diversify, then in the boom years — forget diversification. We’re all too busy getting rich off of oil and gas money.”
Companies that aren’t involved in oil and gas actually get crowded out of the market, unable to hire workers because everyone is going into the oil and gas sector, he said.
“We’re a resource economy.”