Weathering economic storms
At this time of year it is not uncommon to see storm clouds emerge on the horizon seemingly out of nowhere. Some of these summer thunderstorms can produce strong winds, hail and downpours, yet, even when there is damage caused, they pass and sunnier skies return. While there will inevitably be a few economic storms to weather, the foundation in southern Alberta remains stable.
From a housing perspective, changes over the last few years to federal mortgage lending rules combined with moves to increase the prime rate by the Bank of Canada have cooled real estate markets across the country. The overall housing market in Alberta remained relatively flat year-over-year and, although stable, remains below pre-recession levels. In Lethbridge, overall housing starts for the first half of the year, at 272, were down 10 per cent. A stronger economy typically results in housing starts, but this may be currently offset by higher mortgage rates, inventory volumes and a slight slowdown in population growth over the past two years.
While local economic indicators are important, we need to understand the potential impact of global factors as well. In an effort to address concerns from our local exporters, we were pleased to host Liam Stone, from the Government of Alberta, to provide his insight as the managing director of the Alberta Washington office. He shared information into the progress of NAFTA negotiations and the potential impact of tariffs with community business leaders in attendance. Local exporters play an important role in our economy and the potential cost and sales impacts of retaliatory tariffs could have a negative impact on local business. In fact, a number of manufacturers have already seen significant cost increases for steel required to produce their products. Since trade with Alberta is responsible for almost one million jobs in the United States, it’s important for both business and government leaders to educate their peers in the U.S. about the impacts on employment and costs for American consumers if the current trade dispute escalates into a full-blown trade war.
While we cannot ignore, or even change, the storm clouds of trade, tariffs and external factors, as an organization we are here to help! As a mid-sized city of close to 100,000 people with a trading area of 350,000, we continue to see how the stability in traditional sectors, growth of emerging industries and strength in the public sector creates a positive environment for continued diversification and bright opportunities. We work to foster collaboration among industry and business, governments and institutions and provide businesses with the information and support needed to relocate, start or grow. We can also help you identify funding opportunities, access research and data, connect you to resources and answer questions about trade, regulatory changes and more. Give us a call at 403-331-0022 or email info@chooselethbridge.ca for more information.