The pain from low oil prices has been felt in Red Deer, but diversity may help the city weather the economic storm.
Reg Warkentin, Red Deer and District Chamber of Commerce policy co-ordinator, said in an email that the slump in oil prices is starting to have a ripple effect in the local economy, extending beyond energy sector businesses.
“With sub $50 oil, drilling activity is half of what it was a year ago, and major construction projects have been put on hold and even shelved indefinitely,” writes Warkentin.
“We’ve heard about a number of businesses making layoffs to get to the point where they can keep themselves afloat, maintain core operations, but still be prepared for when activity picks up.”
However, Warkentin pointed to diversity as a factor in how the city will handle the economic situation.
“A number of businesses have been looking to diversify their revenue sources, like the oilfield manufacturers who are starting to sell more products abroad to places such as the Middle East, where activity remains strong.”
The most recent unemployment statistics indicate Alberta had a six per cent unemployment rate as of July. That’s the same as B.C. and lower than Ontario, which is at 6.4 per cent.
According to Statistics Canada, Red Deer’s unemployment was 7.3 per cent, above the provincial average, in July. The jobless rate has increased significantly from 2014, when it was 2.8 per cent in the same month.
“Our little economy is a little more diversified than we give it credit for,” said Warkentin. “There are a number of major projects underway, such as the Nova expansion, infrastructure projects like new schools and roadways and assisted living facilities. Construction of new homes remains strong, too.”
An Aug. 7 news release from the City of Red Deer said commercial building permits were up in 2015 (from January to July) with 98 permits valued at $21.8 million compared to 2014, with 77 permits valued at $10.67 million.
Residential permits were down from 818 permits valued at $68.56 million in 2014 to 652 permits valued at $53.7 million.
“Most local businesses have been through a slowdown like this at least a few times,” said Warkentin. “They maintain a positive attitude, adapting to meet challenges outside of their control.”