According to Gary Lamphier’s article in the Edmonton Journal, Edmonton is the place to be in 2011 as well. Here’s an excerpt:
Edmonton’s economy regained its footing this year after a crash in energy prices triggered a painful recession in 2009.
The nascent recovery will pick up speed in 2011, the city’s chief economist predicts, as robust oil prices and an upturn in manufacturing drive Edmonton’s annual growth rate to nearly four per cent.
That’s well above the projected national growth rate of roughly 2.5 per cent, according to recent forecasts prepared by Canada’s major bank economists.
The good news for Alberta’s capital city doesn’t end there, either. Over the next decade, as output from the oilsands grows, the city should rank among the top economic performers in Canada, says John Rose, who was appointed Edmonton’s economics chief in May.
“We just finished our three-year and 10-year forecasts. We looked at a baseline scenario and a (more optimistic) one, reflecting alternative views on how quickly the energy sector bounces back and to what extent,” he says. “Even using a pessimistic scenario, Edmonton’s economy still continues to grow. So the real message here is that at least for the medium term, growth is baked into the pie for Edmonton.”
“Edmonton has done surprisingly well through 2010, and the broader Edmonton region will probably outperform the province as a whole this year,” says Rose.
In regards to recent concerns about the average Canadian household debts, the article quotes Mr. Rose as saying:
“To some extent Edmonton is insulated from that because of the quality of the employment here, our relatively high disposable incomes and a relatively benign provincial tax regime,” he says.
“But we’ll start to see interest rates moving up again by the final quarter of 2011, and that’s going to be a problem for the Canadian economy. Consumers will begin to realize the true cost of the debt they’ve taken on. Still, I think the problems here will be much more modest than in Ontario or B.C.”
Once rates do start to rise, as the Bank of Canada fends off inflationary pressures, Rose predicts the runup will be fairly rapid.
“You’ll see rates move up very quickly, probably starting in the last quarter of 2011. I’d say we’ll see 50 basis points by the end of 2011 and something like 200 basis points in 2012,” he says.
“That’s going to be a shock to many people, particularly people who have gone on a variable rate or a short-term mortgage hoping to save a few cents. It might be prudent for those people to maybe go into a five-year ( fixed rate) mortgage or some longer-term arrangement.”
Read the full article here
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