Barry McDonald & Christina Hovde
In February, 2012, Todd Hirsch, a highly respected speaker, instructor and Senior Economist with ATB was brought in by the Wetaskiwin and District Chamber of Commerce to share his assessment of the economy and provide predictions for future.
At that time, the entire world economy was in turmoil. Canada was experiencing a slowdown in its economy. Canadians felt we were back into a recession and at risk. As a very trade-dependent nation, Canada was captive to the economic state of its global trade partners—particularly the United States – who were facing growing increasing debt and deficits. Media reports at the time were stating the USA was in a crisis situation, but Hirsch viewed it as, “Contrary to media reports, the country (USA) is in trouble, but not in crisis.” However, he also added that the challenges the USA was facing created parallel challenges for Canada.
Amid the doom and gloom news, Hirsch left Chamber members with some comforting advice. “Although the province did seem somewhat immune from the global softness in 2011, (because of the demand for oil) the fate of the province’s economy in the coming year still depends on what happens elsewhere. Alberta has bucked the global trends with an economy that actually picked up steam over the year. The game plan for Alberta in 2012 is to be moderate economic growth, likely holding around 3%, which is not bad. Although we may be in market turmoil, the economy is adjusting to a steady and new normal.”
So, two years and four months later, Hirsch returned to Wetaskiwin, this time the guest of JEDI, the Wetaskiwin and District Chamber of Commerce and ATB with news that aligned with his earlier predictions.
Christina Hovde, summer student at the Wetaskiwin Heritage Museum, summarized Hirsch’s return to Wetaskiwin; “On Tuesday morning, June 17th, ATB Financial, JEDI, and the Wetaskiwin & District Chamber of Commerce hosted a Business and Industry Breakfast welcoming ATB Financial Chief Economist, Todd Hirsch, to Montgomery Glens Club House as a guest speaker. Hirsch has been recognized as one of Alberta’s 50 Most Influential People. Having spent some time living in Wetaskiwin as a child, Hirsch indicated that he was pleased to have been invited back to speak.
Approximately 40 early-rising individuals arrived at Montgomery Glens at 7:30 am to partake in a breakfast buffet followed by an insightful presentation on Alberta’s economy that consisted of two parts.
First, Hirsch discussed three illusions of Alberta’s economy: job growth rate, inflation levels, and regional transfers of wealth. Job availability is growing in all areas, Hirsch admitted, but the largest growth is actually at the top and bottom. Finding a job in Alberta is not as easy as it may seem. The demand for employees in the low service sector and at the upper skilled sector remains strong while employees seeking work in the middle are finding it challenging.
Likewise, inflation rates in Alberta appear to be extremely high, yet Statistics Canada’s numbers indicate it is fairly low. The last illusion, concerning regional transfers of wealth, points towards the apparent distribution of wealth away from Alberta. However, Hirsch suggested that Alberta is, in fact, gaining capital in another form – labor. Alberta is accepting highly educated and skilled immigrants which means the province does not have to shoulder the Grade One through Post-Secondary education and training expenses of qualified and trained workers to prepare them for employment.
The second portion of Hirsch’s talk encompassed his forecast for Alberta’s economy in 2015 and the last half of 2014. Touching on four of Alberta’s major industries, Hirsch suggests that Alberta’s economy will have another good year. He predicts that pipeline projects will become more certain, agriculture is in for another prosperous year, non-residential building will increase, and consumer confidence, which is currently extremely high, will continue to remain so.
In addition to addressing the three illusions of Alberta’s economy, Hirsch revealed a few other key points.
Retail is reaching new heights every month, including restaurant and bar revenues. Consumer confidence will level off in 2014. Non-residential construction will remain strong in 2014 but will be a little more moderate. Energy pipelines will see more certainty on projects. The Dollar will strengthen in the second half of 2014 to $0.92 – $0.94, which is the best level to support foreign exports. Interests rates will rise at the end of next year, but the increase will be moderate. Cost of homes will increase 11.5%, and food 12.3%. Average wage in the oil sector is $2077 per week, compared to provincial average of $925 per week, with the food and accommodation service industry $420 per week. Lastly, Hirsch commented that the oil sector creates 15% of new jobs in Canada.
Hirsch left the audience with a feeling that Canada, the USA, the world, but especially Alberta are on a steady road to financial recovery. He cautioned how the economy is linked worldwide, and issues that are going on in locations like Iraq and Ukraine/Russia have an impact on our economy. Unfortunately, issues like the war in Iraq creates concern about energy supplies, but this has a positive impact on Alberta and Canada’s economy as an energy provider.
For more detailed information about predictions and solutions regarding the present and future state of our economy go his website www.toddhirsch.com.