Economic forecasters are quite bullish on Edmonton’s outlook with especially good numbers in migration and oil and housing.
New numbers from the Conference Board of Canada show that despite a few recessionary tremors, the United States’ surprising economic strength and Saudi production cuts buoy the Edmonton financial scene, according to Robin Wiebe, lead economist for The Conference Board of Canada.
“One of the things that’s driving is obviously somewhat better oil prices, so that’s a plus for Alberta,” Wiebe said in an interview from Ottawa.
A slight cooling in the housing market in the second half of 2022 tapped the brakes in full-year growth numbers for the finance, insurance, and real estate sector, which is Edmonton’s biggest industry. That slowed to 1.6 per cent growth from a 2.9 per cent advance in 2020-2021.
That’s happy news for consumers in Edmonton and elsewhere, as Edmonton’s Consumer Price Index cooled to just 2.6 per cent growth in the second quarter of 2023, much better than 2022’s second quarter peak of 7.2 per cent.
Then there’s the GDP. Last year, Edmonton’s GDP rose almost five per cent. The gross domestic product is the sum total of all goods and services produced in a local economy and one of the broadest measures of growth.
Influencing factors include post-pandemic growth, higher oil prices and relatively strong housing resale markets, as well as “decent” employment growth, Wiebe said.
People are coming to Edmonton
More people are coming to Edmonton from around Alberta, across Canada and around the world.
“International migration has really ramped up. The federal government is hoping to bring in quite a number of new Canadians,” Wiebe said, noting cities across the nation are seeing the spikes.
“Last year, Edmonton brought in almost 33,400 international migrants. That is, I believe, a record,” Wiebe said.
In the two decades between 2002 and 2021, Edmonton averaged 10,743 international migrants a year.
That makes 2022’s figure for international migration to Edmonton triple that of the 20-year average.
Interprovincial migration is another recent success story for Edmonton. Although between 2016 and 2021, Edmonton lost people to other provinces over six straight years, the trend reversed in 2022, with more than 8,900 migrating from other provinces. Numbers for 2023 are forecast to be almost as strong, around 8,600, Wiebe said.
Overall, Edmonton has a long track record of attracting people from other Alberta cities and communities.
Last year, 3,057 people moved to Edmonton from elsewhere in the province — the 20-year average has been 3,159 per year — and that number’s expected to go up about 50 per cent this year.
Over the last 25 years, Edmonton hasn’t suffered net outmigration to other cities in Alberta in any year, Wiebe said.
The peak of net migration to Edmonton from other Alberta cities was in 2017 with a high of about 5,100. The low point was 1997 when a net 97 people moved to Edmonton from other Alberta cities.
“Population growth, all things considered, has been really brisk,” he said.
In the past 20 years, overall annual population growth in Edmonton has averaged 2.2 per cent. Then, in 2022, it jumped to 3.1 per cent. The rate is forecast to accelerate even a bit more in 2023 and to stay strong in 2024.
“These are really strong numbers in a historic context,” he said.
Jobs and houses.
Nowhere does the delicate relationship between supply and demand play out more visibly than in housing. A national story, it’s bigger still in Edmonton, where relatively affordable housing, by national standards, plus a strong job market, means the province’s capital attracts migrants from elsewhere.
“Between jobs and housing, it makes sense for a lot of people to move here from other parts of Canada,” Wiebe said.
Jobs are looking up
Employment’s looking rosy in Edmonton with figures showing recovery in 2021 and 2022.
“Employment grew 3.9 per cent last year, and we’re looking at another 3.5 per cent growth this year,” Wiebe said.
On the flip side, in the first half of 2023, the average unemployment rate was doing much better at about 5.7 per cent, with figures just a touch higher forecast for 2023 and 2024.
That’s big improvement from 2020, when it averaged more than double that at 11.8 per cent unemployment in Edmonton and high everywhere else in the throes of the COVID-19 pandemic.
“Edmonton’s unemployment rate peaked in the second quarter of 2020 when it was 15.6 per cent,” Wiebe said.
“That was a record high, and obviously a really bad number.”
Supply/demand balancing act in housing
Although housing prices eased a bit in the early part of 2023, they’re recovering because the balance of supply and demand has moved into balance, Wiebe said.
The sales figure dropped sharply at the beginning of 2023 but that has recovered with a ramp-up in demand that’s been met by not that much supply, he said.
Edmonton’s resale market currently is in a fairly balanced position. It’s not a “buyer’s market,” it’s not a “seller’s market” — yet.
Wiebe keeps an eye on the builders’ inventory of unsold houses, where new home prices are responding to higher interest rates.
“When inventories rise, it’s a signal for builders to pull back on construction,” he said.
Diversified housing a key to unlocking Downtown Edmonton’s inertia, experts say
‘Stop the feeder process’: Renowned doctor advocating for homeless speaks in Edmonton
Starts for new single-family homes are off, as inventories for those are rising fast, Wiebe said.
“The backlog on single-family housing in Edmonton is really rising. It’s twice what it was last year,” he said.
New single-family homes are more expensive, so if affordability is stretched, people will look to the existing housing market, he said.
People have been snapping up more affordable forms of housing. Ownership apartments (condos) inventory is falling a bit. That speaks to affordability, Wiebe said.
Looking ahead, the Edmonton resale home market may get tighter — almost in a seller’s position, and new single-family homes under construction is expected to rise again, he added.