Fizzle fo shizzle me drizzle

Sizzle turns to fizzle as Alberta's growth cools

Alberta's super-boom is gearing down to cruising speed as the pullback in commodity prices reduces the torrid pace of economic growth. Oil prices have dropped below US$60 a barrel, and natural gas has fallen further than that. OPEC is worried enough to talk about cutting back production. In Alberta, particularly in Calgary, some of the sizzle is fizzling. The housing market is returning to more normal operations. Energy companies, especially those focused on natural gas production, are cutting spending. And the flood of migrants from other parts of Canada into Calgary is predicted to dwindle next year, falling by more than half from record levels this year, according to Calgary Economic Development. But the most telling sign of a return to merely good times is this: A year ago, Albertans were caught up in endless speculation about how large a cheque the government would be cutting in the rebate program that was quickly dubbed Ralphbucks; this year there are no Ralphbucks in Alberta. Instead, there is worry that the province's surplus, although still substantial, could fall below budget forecasts. According to Toronto-Dominion Bank chief economist Don Drummond, there is scant chance that Alberta's boom will turn into a bust. But he does predict a significant decline in the rate of economic growth, with the 6.8% expansion in Alberta this year dropping to just under 4% in 2007.Although that is a significant cooling for Alberta, in any other part of Canada such growth would mark a major economic boom. Alberta will expand at close to twice the national average next year, a far quicker pace than Ontario and Quebec, Drummond noted. A less incandescent Alberta economy should be seen as a welcome respite from the breakneck expansion of this year, he said. Next year, inflation pressures will ease and unemployment will rise slightly to 3.7% in Calgary, Calgary Economic Development predicted. Even with a lower level of migration from other provinces, the growth in the labour force will outpace job creation, it said.
(Globe and Mail 061006)

Nice to see sanity finally returning. It's been an exciting 12 months though!