Of course it’s guesswork, but it’s professional and Calgary-insider guesswork. For a fresh start to the new year, Business in Calgary asked six respected business leaders to share their thoughts on what the city may look like in 2018.
- Curtis Stange, chief customer officer at ATB Financial.
- Joe Binfet, managing director and broker at Colliers International.
- Zoe Addington, director of policy and government relations with the Calgary Chamber.
- Jory Lamb, CEO of Calgary-based VistaVu Solutions.
- Mary Moran, president and CEO of Calgary Economic Development.
- Tom Westcott, 2018 president of CREB.
Reliable indicators of a 2018 turnaround
STANGE: ATB Financial invests customers’ money back into this province. We have seen strong loan growth compared to this time last year, and this trend should continue. GDP growth is always a good indicator; 2017 data shows Alberta is on the upswing.
BINFET: From a commercial real estate perspective we have seen the bottom limit as to what landlords are prepared to offer in terms of lease rates. There is a general mindset that three years from now lease rates will indeed increase and that now is the time to lock in commercial terms for office space.
ADDINGTON: Some key indicators suggest that Calgary and Alberta’s economy is improving and gaining momentum – growth in the areas of oil and gas, agriculture and food processing, tourism, and manufacturing. There was a four per cent economic growth in 2017 largely due to oil prices stabilizing, which has spurred investment within the sector. The retail and housing sector has also improved, which indicates consumers are more optimistic about the economy.
LAMB: Canada is a beneficiary of a strong U.S. economy and an increase in energy exports is good for all of Canada. A concerted Calgary effort to attract investment capital into technology and innovation creates optimism for 2018. We will see a continued increase in the number of startups and an increase in economic diversity within the Alberta economy.
MORAN: There is a lot of confidence in the traditional measures of economic health, such as GDP growth, unemployment slowly edging down and crude oil prices above US$50 a barrel. The oil and gas industry is focused on improving efficiency and sustainable growth but likely will not ramp up to previous staffing levels. There is a sense of a sustained turnaround in terms of growth in sectors like T&L [transportation and logistics], cleantech and agribusiness.
WESTCOTT: Although our full 2018 forecast will only be available at the end of January, 2017 seems better than expected. There are far more homes available in the lower-price ranges now than compared to several years ago. This provides more options and choice for potential buyers who may be considering their purchasing power, given all of the changes in the lending market.
Some key aspects of Calgary’s new normal
LAMB: There will be a greater number of domestic players in the oil and gas market. Because of our regulatory burdens and high taxation, Calgary will continue to struggle to be a preferred investment location for global players in the energy industry. The good news? The ingenuity and drive of many Calgarians to create their own future and fortunes will create an interesting time of innovation and growth.
MORAN: The new normal in Calgary will still be driven by the energy industry. The most valuable resource is our well-educated, innovative and entrepreneurial workforce. It’s not a city where people sit around and wait for something to happen. The economy is expanding in key sectors beyond the traditional oil and gas industry.
STANGE: We’ve seen many Albertans struggle in the economy and some Alberta businesses are being prudent in their spending and have had to become more innovative during challenging times. At least for the short term, the new normal for Calgary will be a challenging job market. Calgarians will have to broaden their scope to non-traditional sectors and jobs.
WESTCOTT: The Calgary market always has its ebbs and flows and it’s about understanding the key fundamentals. For example, looking at comparables when listing a house or considering location and neighbourhoods when buying a home.
BINFET: The new normal in Calgary is the fact that most companies can’t see past a three-year time horizon. Shorter-term vision impacts business plans in terms of capital investments, costs, hiring and office space commitment. Efficiency and moderation are the new norm for companies going forward.
ADDINGTON: Calgary business research shows much more optimism about the economy in late 2017 than earlier in the year. Many leaders indicated increases in spending and capital investments. Although the economy may be slowly making a turnaround, it has not yet translated into jobs. Costs for businesses, including labour costs, are high and businesses are cautious to commit to new hires.