This is a post from Alex Carrick's blog that covers the Canadian construction industry.

Since 1985, Mr. Carrick has held the position of Canadian Chief Economist with Reed Construction Data's CanaData, the leading supplier of statistics and forecasting information for the Canadian construction industry.

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Construction Industry Forecasts

Notes from Alex Carrick - Jul 15, 2009

Alex Carrick
Where is the Economic and Construction Action in Canada’s Major Cities?

It is always fascinating to consider what is happening in the major cities across the country. Which cities are in the vanguard and which are bringing up the rear? This is all about the economy at the local level. It ties in to economic sectors that are expanding, contracting or staying at an even keel. It often means assessing the outlook for raw material markets, although in larger urban centres, services play major roles. Generally speaking, diversity is good because it helps cities weather economic storms better. Much of what follows refers to CanaData’s composite ranking of city labour markets based on employment growth (highest to lowest) and unemployment rates (lowest to highest).

Saskatchewan’s Treasure Chest

As of Statistics Canada’s latest labour market report, for June 2009, Regina and Saskatoon are the number one and number three ranked cities for labour markets in the country. Both cities are experiencing rapid job growth and low unemployment rates. As a result, Saskatchewan has the lowest unemployment rate in the country, at only 4.6% versus 8.6% for Canada as a whole. Saskatchewan’s treasure chest of raw materials, in energy, grains, potash, uranium and even diamonds, is finally getting recognition.

Atlantic Cities Poised to Benefit in Two Ways

The major cities in the Atlantic region are doing much better than during previous recessions. They are now poised to benefit from a recovery in natural resources in two primary ways. Once housing starts move up in the United States, the Atlantic’s forestry sector will make gains. And as oil prices advance, Newfoundland’s offshore industry will move back into prosperity. This will also be an incentive for more mega project investments in the region. Finally, Saint John N.B. has recently completed an LNG project that will reap rewards due to assured feedstock supplies from Trinidad-Tobaggo.

Many People not Fooled about Alberta’s Prospects

For all that the oil and gas sector has been in retreat in this recession, Edmonton and Calgary are still among the best labour markets in the nation. They have unemployment rates (6.5% and 6.6% respectively) that are significantly lower than in Canada as a whole. The latest demographic report, for the first quarter of this year, from Statistics Canada highlights that Alberta’s population is still growing the fastest among all of the provinces. Despite project delay announcements − some of which have now been rescinded − many people have not been fooled into thinking that it is all over for Alberta’s oil patch.

Ontario Cities Occupy the Bottom

Seven of the eight cities at the bottom of the ranking are in Ontario. That is due to the problems in the manufacturing sector, combined with construction markets that are seeing housing start declines, retail and office building faltering and not much lift so far from engineering work. This may be about to change with utility construction and bridge, road, highway and rapid transit work spurred on by government infrastructure programs. However, one extra shot of stimulus that was supposed to come from a nuclear power plant expansion program has now been moved off the stove top, at least until the federal government can sort out the ownership structure of Atomic Energy of Canada (AECL).

Windsor and St. Catharines-Niagara

The three worst labour markets are in southwestern Ontario − London, Windsor and St. Catharines-Niagara. The latter two have had to worry about auto sector jobs, although positions are being saved in Windsor as Chrysler has emerged from Chapter 11 and is calling back workers. However, Windsor is still struggling under the impact of a municipal workers strike that has dragged on for three months. The strike by city workers in Toronto is short-lived by comparison, only now stretching into its fourth week.

Pity St. Catharines-Niagara, first hit by auto sector closures, then having to adjust to fewer American tourists. The trip to Canada for U.S. visitors has been made much harder since they cannot return home without proper papers. Most Americans are not used to going through the application process and incurring the expense of acquiring a passport.

Alex Carrick

Find Canadian construction-related economic articles in Canadian Construction Market News and in the Economic Outlook section of Daily Commercial News. Mr. Carrick also has a lifestyle blog that can be reached by clicking here.


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