Talent Development Centre

Tag Archives: edmonton

All Talent Development Centre posts for Canadian technology contractors relating to Edmonton.

What’s Really Going to Happen to the Price of Oil?

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Cameron McCallum By Cameron McCallum,
Regional Vice President at Eagle

The Edmonton Branch of Eagle held a Contractor Appreciation event just last week in Edmonton and I always enjoy the opportunity to meet those who share the front line of the IT contracting world. And as usual, while much of the chatter involves getting to know everyone just a bit better, there comes a point in the conversation where the inevitable happens and the discussion turns to the market and what our predictions are for the short and long term future of the economy. And a big part of the discussion this time around centered on the situation in the oil patch.

First off, Edmonton is not Calgary. Edmonton’s economy is more diversified and less directly impacted by the low price of oil. We have a large public sector that spends massively in health care, infrastructure and education. There is a thriving small to medium business sector that provides all kinds of products and services and employs a large number of Albertans. But also true is that the funds that the public sector uses to fund its projects comes from revenue directly related to the resource sector and many of those small to medium sized business’ products and services are directly targeted at the oil industry. So it was no surprise that the question being debated amongst a number of attendees was just what was going to happen to the price of oil.

What's Really Going to Happen to the Price of Oil?This article written by Peter Tertzakian for OilPrice.com uses the analogy of the fashion world to describe why oil prices might just be ready to ascend.  Given how interesting and relevant it is to the discussions I had just last week with independent contractors in Edmonton, I thought I’d take the opportunity to share it with all of our readers on the Talent Development Centre:

Why Oil Could Head Back To $90 Sooner Than Thought

Island in a Storm: Outlook for Edmonton in 2016

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Cameron McCallum By Cameron McCallum,
Branch Manager at Eagle

Island in a Storm: Outlook for Edmonton in 2016I recently attended a presentation given by John Rose, Chief Economist for the City of Edmonton, where he offered an analysis of what the future — short and medium term — held for Alberta’s capital city. While the province’s struggles in the wake of an excruciatingly low-priced barrel of oil is well documented, he offered a cautious but mildly optimistic outlook for the city itself. The following are the salient points as I saw it:

  1. Rose predicted modest growth for Edmonton in 2016, likely somewhere around 1%, which is a slowdown from past years when growth hovered closer to 3% and higher.
  2. Construction, Public Administration, and growth in the Retail sector in Edmonton have offset losses connected to stagnation in the resource sector and he felt Edmonton will be much quicker than the rest of the province to return to more robust growth in late 2016 or early 2017.
  3. Growth in Edmonton will be dependent on government investment. Should resource revenues and oil prices continue to remain unusually low and government decides to drastically reign in spending as a result, all bets are off and further recessionary pressures would be forthcoming.
  4. Unemployment in the province will increase by as much as 3.5 to 4.0% in the North (Wood Buffalo) and South (Lethbridge/Medicine Hat) and Fort McMurray, Red Deer and Calgary are seeing a surge in job losses. Edmonton is likely to see this key indicator grow as well, but only by 1.0%.
  5. Low oil prices will continue into 2017 when a potential slowdown in US production helps firm up the cost of a barrel. However, Mr. Rose was quick to point out that he doesn’t see the price of oil returning to the $100 mark and that the new normal would be between $50 and $80.
  6. While a slowdown is not typically ideal for any economy, Mr. Rose did point out that continued low interest rates and modest inflation pressures would contain cost escalation for capital projects and gives the city a chance to address infrastructure and services deficits and that now is perhaps as good as any time for investment in our future.

While I’m unqualified to make these types of predictions, I can say that what I am seeing in the Edmonton market and from conversation with our clients, these observations are accurate for now. A downturn in some sectors has been offset by activity in others and Edmonton remains, at least for now, a viable and prosperous city with excellent opportunities for professional contractors.