New experimental business conditions index
Business conditions in Calgary and Edmonton were much better heading into July 2021 than they were last August
By Rob Roach, ATB Economics 8 July 2021 1 min read
Statistics Canada has developed an experimental measure of business conditions in Calgary, Edmonton, Montreal, Ottawa, Toronto, Vancouver and Winnipeg called the Real-Time Local Business Conditions Index.
A rising index reflects improving business conditions in an urban centre, while a declining index signals deteriorating business conditions.
The first release of the new index covers the period from August 10, 2020 to July 4, 2021.
Not surprisingly, business conditions in Calgary and Edmonton were much better heading into July 2021 than they were last August when the economy was still reeling from the first round of lockdowns and facing a second wave of the virus. Since then (and keeping in mind regular seasonal variations in business activity), the index has tended to rise and fall along with the implementation and removal of public health measures.
In Calgary, the index got as low as 87 the week of September 21, 2020 and as high as 161 the week of June 14, 2021.
Edmonton’s index peaked the week of June 7, 2021 at 187 and reached its lowest point (94) the week of August 31, 2020. (See the note below about being cautious when comparing the two cities.)
With most public health restrictions in the province lifted on Canada Day, the index should (notwithstanding seasonal fluctuations) continue to improve over the second half of the year.
Please note: We have to be careful interpreting the index because the higher numbers for Edmonton do not necessarily mean that business conditions in the capital have been better than in Calgary. The index only measures conditions in each city relative to where they were in that same city during the week of August 10, 2020. As a result, even though Edmonton’s index has been higher than Calgary’s, this does not necessarily mean that business conditions have been better in an absolute sense. What the index does tell us is that the bounce-back in Edmonton relative to where it started in August has been higher than in Calgary.
Answer to the previous trivia question: The average price of a barrel of Western Canadian select oil in April 2020 was just US$3.78.
Today’s trivia question: Which Census Metropolitan Area is larger in geographic terms: Calgary or Edmonton?