Wednesday, October 14, 2009

Economic Report: Calgary's economy to climb, but the need to give grows too

Calgary’s economy will continue to strengthen as global economies recover, but cash-strapped families may still suffer without charitable donations, according to an economic growth report released today by The City of Calgary.

The 2009 - 2019 Socio -Economic Outlook forecasts the local, national and international economy over the next 10 years and assesses consequent social concerns stemming from the city’s growth.

“Residential construction projects are rising again after significant weakness in the past year, which is a positive sign,” said City Economist, Patrick Walters.

One of the key messages of the report is to remember those members of the community who will continue to struggle financially.

Increasing household financial stress due to decreased income, rising unemployment and household debt has caused significant challenges for some households.

“It is expected that significant current and new challenges will persist in meeting the needs of vulnerable households, given the current capacity constraints facing Calgary’s public and voluntary sectors,” said Derek Cook, Research Social Planner.

Unemployment has doubled to 7.0 percent since August 2008 and there is concern that falling household incomes and corporate earnings may lead to reduced charitable donating even as the demand for service grows.

“Looking forward, expect the funding environment to remain challenging over the next two years until economic growth picks up in earnest in 2011,” said Cook, adding that governments and charitable agencies need to be aware of these challenges and be prepared to support those being affected.

The 2009 - 2019 Socio-Economic Outlook was collaboratively produced by The City of Calgary Corporate Economics and Community & Neighbourhood Services, to inform planning and budget deliberations.

2009 – 2019 Socio-Economic Outlook Highlights:

  • Economic activity in the Calgary Economic Region (CER) should contract by 2.5 per cent in 2009 and then increase by 2.2 per cent in 2010.
  • As economic growth in the US and the emerging economies gather momentum, the CER’s output should expand by 3.4 percent in 2011.
  • Resulting from the global recession, the unemployment rate rose from 3.5 per cent in August 2008 to 7.0 per cent in August 2009 as labour force growth outstripped employment growth.
  • Total employment in the CER was estimated at 753,000 in 2008, up from 735,000 in 2007. The forecast is for total employment to decline to 745,000 in 2009 and rebound to 756,900 in 2010 as economic growth resumes.
  • Although the current economic recession may prompt expectations of a decline in immigration to Calgary, the population is expected to increase by an average of 21,300 annually from 2009 - 2019
  • With the onset of the recession there is concern that falling household incomes may lead to reduced charitable giving even as the demand for service grows. Additionally, shrinking corporate earnings may also lead to reduced corporate donations and sponsorships, while rising government deficits may lead to increased constraints on public funding.
  • Although vacancy rates have started to rise, Calgary’s rental stock continues to shrink as more units are converted to condominium ownership and little new rental stock is constructed, contributing to an ongoing lack of affordable housing.
  • Calgarians continue to feel relatively safe as both person and property crime rates fall, and the severity of crime is lessening. Despite decreasing overall rates of crime, however, concern about certain types of crime is rising, particularly organized crime and gang activity which is occupying more and more police resources.
The full report can be found online.

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