Calgary's post-pandemic economy poised for 6.9% expansion in 2021, report says

Calgary's economy is going to start roaring back to life next year, but not before the city posts a dismal 10.1 per cent GDP contraction for 2020 as the pandemic and the energy sector slump continue to take their toll, according to a report released Tuesday.

The Conference Board of Canada's forecast for Calgary's economy says that after being put through the wringer in 2020, the city's fortunes will start to turn around in the new year.

"As the pandemic eases and oil prices slowly begin to strengthen, our call is for the Calgary economy to expand by 6.9 per cent in 2021," the report said.

Calgary's labour marketalready shed 44,000 jobs from the second quarter of 2019 to the first quarter of 2020.

Another 90,900 jobs were lost in the second quarter of this year, and the board predicts employment will fall by a record 8.0 per cent overall in 2020.

The report predicts Calgary's unemployment rate will remain high for many more months, averaging 11.3 per cent this year and 10.4 per cent next year.

"Calgary won't recover its lost jobs until the end of 2022, partly because the oil and gas sector will recover only slowly," the report said.

Some sectors of the economy are expected to recover faster than others.

The board says Calgary's badly bruised retail sector which saw sales drop by 5.1 per cent in 2020 will bounce back and grow 9.7 per cent in 2021.

But the arts and entertainment industry, which declined 26.2 per cent, and the accommodation and food industry, which fell by 36.9 per cent, might not fully rebound until 2022, the report says.

Speaking Tuesday at the annual outlook conference hosted by Calgary Economic Development, ATB Financial chief economist Todd Hirsch said it'sexpected that unemployment in Alberta will drop only slightly to 11 per cent next year and remain in the double digits for some time yet.

"It's going to take a lot of growth, maybe a few years of growth, to absorb all of that excess labour and make sure everyone finds jobs. So it's going to take us a while and we don't think we're going to be back into single digits probably until 2022 or even later," he said.

"To get back to 2014 levels, we estimate that's not going to happen until probably 2024. So it's sort of a lost decade of growth for this province."

Calgary Economic Development is banking on the technology sector to help turn around the city's fortunes.

CEO Mary Moran says companies are already realizing what Calgary has to offer, pointing to how several tech firms have moved into empty office space downtown.

"You have seen the real estate industry adjust to shorter-term leases, different floor plates, different amenities that they're offering. And those ones that have made that adjustment are the ones where the tech companies are migrating to."

Moran says her organization's goal is to double the number of tech companies in Calgary by the end of this decade.