EDMONTON - Edmonton led the country in job creation over the last 12 months, says the city’s chief economist.
But that expansion will heat up the local economy next year and may boost inflation and create labour shortages, John Rose said Thursday.
“The metropolitan area of Edmonton has generated more jobs than any other metropolitan area in the country — 44,900 jobs in the past 12 months,” Rose told an economics conference Thursday.
“These aren’t greeters at Walmart, this isn’t people giving each other yoga classes. These are jobs in manufacturing, jobs in construction, jobs in transportation, jobs in professional services. We’ve actually seen part-time employment in the city shrink, so in fact we’ve had probably around 50, 55,000 full-time jobs created, with a net gain of 44,900.”
Calgary, according to Statistics Canada data that Rose presented, added about 25,000 jobs in the period Rose discussed.
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Rose, speaking at a downtown hotel, cited oil prices as the driving force behind the growth. Over the 12 months ending in October 2011, the price of oil peaked in April 2011 near $110 a barrel and sat near $90 in Oct. The price of oil generally rose from 2010 to 2011.
Unemployment in the province, Rose predicted, will sit around five per cent next year. He pegged general inflation at 2.7 per cent for 2012 — down from its current four-year high of 3.4 per cent, but still more than double the rate in 2010.
Cenovus Energy accounted for around 200 new jobs in the Edmonton area. The oilsands firm, which assembles its extraction equipment in modules at a plant in Nisku, nearly doubled the number of contractors at its plant since December of last year. Reg Curren, media relations adviser with Cenovus, said that might increase further as the plant ramps up module production in the coming months.
The plant produces “approximately 17 to 20 modules a month, and that’s forecast to increase to about 25 a month,” said Curren.
An unemployment rate below 4.5 per cent indicates a labour shortage and creates wage inflation, said Rose. He forecast both as problems for certain industries around Edmonton in 2012. He said manufacturing already feels the labour squeeze.
“The manufacturing sector in this community is having real problems finding the people they need at this point in time,” said Rose. “We’re going to see that start to spread out into construction, into transportation, into professional services in the not-too-distant future.”
“I put that out as a warning for employers to get ready for an environment which is going to be highly competitive, particularly when it comes to those at the higher end of the skill range.”
“We’ve already seen signs of shortages of both skilled and semi-skilled labour,” said Brian McCready, vice-president of Alberta and Saskatchewan for Canadian Manufacturers & Exporters. “Pricing to fill positions is going up.”
McCready said CME plans to address the shortage by training current employees, investing in new equipment and encouraging government to ease laws around foreign workers, particularly those from the U.S.
Rose said Edmonton’s labour market absorbed most of the available local workforce over the last year, making a similar increase in job numbers unlikely in 2012. “There isn’t much juice left to squeeze in the labour market,” he said. “That’s good news, but that’s going to lead quite quickly to marked shortages of skills in particular sectors of the economy.”
Job growth was stronger in surrounding areas than in the city proper, according to Rose. “Part of that very rapid growth you see for the region is really still a recovery element, as opposed to the City of Edmonton, which took a much more modest hit during the recession,” he said.
“We’ve got the jobs, we don’t have the people. How do we square that circle?” he said. “It’s going to be interesting.”
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