indicatorThe Twenty-Four

The Seven, July 5, 2024

Jobs, exports, oil production and the Stampede effect | By Rob Roach, ATB Economics

5 July 2024 6 min read

In this week’s The Seven…

  • Jittery June jobs report
  • Alberta’s exports flat in May
  • Another oil production record
  • Interesting Fact: The world’s most liveable cities (sort of)
  • Chart of the Week: The Calgary Stampede effect

Can you believe we are now in the back half of 2024? The economic news tends to be a little slower this time of year, but it was still an eventful week with new job numbers released this morning and international export and oil production data out for May.

Labour force performance in June

After a loss of over 20,000 in May, the Alberta economy added 8,100 jobs in June for an increase of 0.3%.* Over two-thirds of the new jobs were full-time positions.

The job growth was a little stronger than the increase in people looking for work so the provincial unemployment rate improved slightly, going from 7.2% in May to 7.1% in June.

Employment growth in Alberta continues to be higher than in Canada as a whole, but stronger labour force growth is keeping Alberta’s unemployment rate above the Canadian average. Alberta’s labour force grew by 4.3% on a year-to-date (YTD) basis compared to 2.8% nationally.

Turning to the national labour market, the number of jobs in Canada was almost the same in June as it was in May with the unemployment rate ticking up from 6.2% to 6.4% (the highest it has been since January 2022). The lacklustre performance in June is another sign that the Canadian economy is “weak enough” to benefit from additional interest rate cuts without reigniting inflation.

At 5.4%, year-over-year wage growth was still too strong for the Bank’s comfort, but other wage data are less bullish and the rise in unemployment should cool wage growth going forward.

Whether or not today’s job numbers will be enough to lead the Bank of Canada to make its next interest rate cut on July 24 (the next scheduled decision date) or wait until later in the year is still anyone’s guess, but it does increase the odds of a cut in July.

*All data in this section have been seasonally adjusted.





Non-energy exports struggling

A large drop in the farm, fishing and intermediate food products category* (-20.1%) offset by a rise in the larger energy products category (+2.6%) left the total value of Alberta’s international exports essentially unchanged in May. Export value pulled back in 8 of the 11 major product groups with all non-energy exports down by 7.1% compared to April.

*This is a somewhat odd category of the North American Product Classification System as it includes things like wheat, canola, cooking oil, flour and live animals, but not things like cuts of meat, frozen potato products and pasta which are included in the consumer goods category.



Seasonal factors and price changes often result in large month-to-month swings, so it helps to look at the year-to-date (YTD) trends. Five months into the year, Alberta’s exports were up by 5.0% over the same period in 2023. Once again, however, it was energy exports carrying the load at +8.5% YTD versus a 4.8% YTD decline in non-energy exports. The non-energy categories posting YTD growth were motor vehicles and parts (which includes trailers) (+21.7%); electronics (+17.5%); consumer goods (+9.2%); and forestry products and building and packaging materials (+5.0%).

Looking ahead, better growth prospects for the global economy over the second half of 2024 and in 2025 in the wake of more interest rate cuts by central banks should provide some overall lift for Alberta’s exports. At the same time, the full impact of the Trans Mountain Pipeline expansion has not yet shown up in the data and we expect to see an uptick in the volume of energy exports from Alberta linked to the added egress capacity.



Another gusher

As we reported earlier in the week, Alberta’s oil production broke another record, posting a record level for the month of May of 3.7 million barrels per day (bpd). Oil production has also never been higher five months into the year, with YTD output running at 3.9 million bpd, up 5.6% from the same period last year. According to its latest forecast, the Alberta Energy Regulator sees annual production rising to 4.56 million bpd by 2033.

Interesting Fact…Way to go Calgary! (with caveats)

Calgary (in a tie with Geneva) was just ranked the 5th most liveable city in the world out of 173 cities by the Economist Intelligence Unit. Vienna is number one. The only other Canadian city in the top 10 is Vancouver in 7th spot. Toronto dropped out the top 10 into 12th due to “a shortfall in housing availability.”

Being in the top 10 is cause for celebration because it highlights the high quality of life available in Calgary. But—and I hate to be a buzzkill—we shouldn’t get too carried away.

First, the methodology behind the list is not exactly scientific with indicators such as discomfort of climate to travellers and quality of international links “based on the judgment of in-house analysts and in-city contributors.”

Second, there are more than 173 cities in the world, so many places that might be as liveable as the cities in the top 10 are not even evaluated. Edmonton, Victoria, Ottawa, Halifax and many others come to mind. (The four Canadian cities included in the survey are Calgary, Vancouver, Toronto and Montreal.)

On the bright side, Calgary is fifth on a widely discussed international list—shining a light on the quality of life available here in Alberta and Canada. We should, however, be skeptical about these sorts of rankings even when it benefits us as they are far from the full story about the quality of life available in other places.

Chart of the Week: The Stampede effect

With almost 50 Stampedes under my belt, I can attest to the energy (and tourists) it brings to Calgary every year. You have to be very careful when assessing the economic impact of a festival like the Stampede because money spent on, say, rides on the midway may not be being spent at local movie theatres. With that said, we can say with certainty that the Stampede stirs up a lot of economic activity that wouldn’t happen otherwise. The clearest example of this is the money spent by tourists. That spending is, in non-technical terms, gravy because it is money flowing into local businesses that would otherwise be spent somewhere else.

Related to this is spending by Calgarians during Stampede that, in the absence of the event, might be spent elsewhere (e.g., on something from Amazon or a trip to another city). It’s extremely difficult to calculate the net gain for the Calgary economy, but a 2019 Conference Board of Canada study pegged it at $227 million over the course of the 10-day event.

Another way to get our heads around the economic impact is to use ATB’s Alberta Consumer Spending Tracker. Using the Mastercard transactions of ATB clients as a proxy for spending by Albertans, we can examine how expenditure levels in the “dining and entertainment” category change during Stampede. Because most ATB clients live in Alberta, the Tracker does not capture spending by out-of-province tourists, but it clearly shows a “Stampede effect” on the spending of Albertans.

Our Chart of the Week looks at spending on dining and entertainment in the province before, during, and after the Stampede. There was a noticeable increase in spending levels during the Stampede in 2023 (July 7-16) relative to spending the week before and after. The same jump during Stampede was observed in 2022 and 2021. Would these jumps occur in early July without an event like Stampede to spur it on? Maybe a little, given that the kids are out of school and the weather is (generally) pretty nice, but the sharp drop in spending the week after Stampede suggests it's not just the pursuit of easy living during summer that is at work.



Answer to the previous trivia question: Owen Crow Shoe from the Piikani Nation and Blood Tribe of the Blackfoot Confederacy is the 2024 Calgary Stampede Parade Marshall.

Today’s trivia question: In what year did the tradition of free pancake breakfasts during the Calgary Stampede start?

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