It has been two (plus?) very long and difficult years for the Alberta economy, especially so in Calgary. Tens of thousands of people had lost jobs and/or have had to take wage or rate cuts. The trickle-down effect from this to the broader economy was huge. Compared to the economic dip created during the 2008/2009 world financial crisis, this was a “valley” for the local economy. During this time, Alberta went from a “have” province to a “have-not” one, adding deficit spending in the billions of dollars. Market rates for contract work fell and more closely matched those in the rest of Canada. The “Alberta Advantage” had all but disappeared.
The City of Calgary has been working very hard to attract new companies to the city and diversify the industry. Over the final months of 2017, Eagle had witnessed some new, small projects popping up here and there. This was partly due to M&A activity, but was mostly outside of the Oil and Gas (O&G) space. This new activity was spotty at best and all companies didn’t participate in a general sense. However, since the New Year the feeling has been more optimistic across a broader base of companies. Big O&G companies are holding their own, although they’re not driving a lot of the new projects. But outside of these, work is beginning to show up again.
In the Information Technology and Communication sectors we are seeing cloud, security, infrastructure, and some new development projects being rolled out. And there does appear to be more companies participating this time. Rates have halted their decline, although there hasn’t been much upward movement either.
Also, an interesting situation has occurred on the skills side of things. It had been common practice that IT consultants relied on new, leading edge projects to keep their skills up-to-date. However, with the lack of projects available over the past two years some are finding their experience/skills have fallen behind where technology is at today. And as companies spark up their new projects, they are looking for employees/independent contractors with knowledge and experience in the latest technology. Oddly enough this has created a skills shortage in certain areas within the market, despite supply and demand being closer to a balance than it has been in a very long time. It will be interesting to see where this takes us.
So, has Calgary officially turned the corner economically speaking? It feels as if it has. I would love to be able to report emphatically and with confidence that things are on the upswing. However, only time will tell. When Calgary came out of the financial recession in 2009/2010, we had one of the busiest summers ever. People were trying to make up for lost time on the projects and lost billings for their businesses. Work and projects were plentiful, and we saw many people foregoing their vacations in favour of getting caught up.
But will this time be different? After two years of depressed economic conditions, one would think that there would be some appetite to make hay. But people are also fatigued. Over the past years, those that were able to find opportunities had to push through working as many hours as possible. When between assignments, they were working extra hard to find their next gig. There wasn’t a lot of rest or downtime over this very long period. So maybe a rest is needed and work will slow over the summer. The continued growth of our economy requires that we get our second wind and push through. The activity level over the next two months will show whether Calgary is back to growing again or whether this will be the new normal (for a while longer, at least).
What do you think? What are your feelings on this subject? Share your prediction by leaving a comment below!