With a shift in how North American consumers are viewing bars and restaurants and their willingness to travel to eat a meal, one of Alberta’s top economists says Canmore’s economy is poised to benefit.
ATB Financial’s Todd Hirsch said Albertans in particular are increasing how much they spend in the food and beverage industry, enjoying the fruits of their labours from high paying oil and gas jobs in places like Canmore.
“I think (food and beverage and retail) are two important sectors to watch because what people are spending in restaurants on food and beverage and what people are spending in the malls and car dealerships gives a very good indication, a good gauge of confidence among consumers,” Hirsch said. “And, judging by where retail and restaurant receipts were in 2013, Albertans are feeling very confident. Almost every single month in 2013 we saw new record highs for restaurant and bar receipts and also retail sales.”
He said he is happy to hear about the inaugural Canmore Uncorked, a food and beverage festival event, set to debut April 3-12 and he hopes it generates tourism for the local economy for years to come.
“For Canmore and Canmore Uncorked, I was really happy to hear about this festival,” he said. “I think food and beverage is one of the growing recreation activities, not only across Alberta, but across North America.
“You see it in all these celebrity cooking shows and all these competitions like Top Chef – food and beverage is hitting the demographics of the baby boomers just right and I think there are a lot of possibilities to promote tourism through food and beverage.”
Hirsch made the remarks during a speech to Bow Valley Builder and Developers Association members on the economic forecast for 2014.
A lower valued Loonie on the market – at 90 cents compared to the American dollar – is also good news for tourism, according to Hirsch.
“I have to chuckle at how quickly we have become accustomed to the idea that the Canadian dollar trades at or above par with the U.S. dollar; over the last four decades this has been really unusual,” he said. “I don’t think we are going back up to par anytime soon and of course there are winners and losers with a softer Canadian dollar, but one of the distinct winners will be tourism.
“One of the reasons why, in fact, over the last four to five years tourism has struggled in parts of Canada is because it has been more expensive for those U.S. tourists. With a 10 per cent discount in everything they buy, those U.S. tourists are a little bit more likely to return to Canada and spend some money.”
Overall in the province, Hirsch said, the food and accommodation sector accounted for 13 per cent of the jobs created after the top three, all highly paid, of oil and gas, construction and professional, scientific and technical industries, which represented 36 per cent of job growth.
“That is the good news because there is a lot of high paying jobs created, but that is not the end of the story. There are also an awful lot of jobs created in food and accommodation,” Hirsch said. “Occupations in food and accommodation are the lowest paid in Alberta.
“Now, I don’t want to lead you to believe that anybody working in food and accommodation is living in poverty because a lot of those jobs are part-time jobs and a lot are held by students.
“Jobs in food and accommodation have accounted for 13 per cent of all new jobs created and if you add to that category two others, retail sector and also health care and social assistance, those three categories are the very lowest paying jobs and they also account for a third of all the new jobs created.”
Hirsch said middle income – or average paying – jobs are not experiencing growth in Alberta. He also said there is more to the issue of inflation than a national average of two per cent would lead you to believe.
Things that experience high inflation, like natural gas at 16.2 per cent or fresh fruit and vegetables up 7.6 per cent, affect lower income earners in the province disproportionately.
“I would not think it is accurate to tell every Albertan that in fact inflation pressures are low if you are a low income individual, inflation pressures are far above 2 per cent,” he said.
Hirsch said 2013 was a pretty good year for the provincial economy and he anticipates this year will be good as well.
“I think it is fair to say 2013 was a pretty good year, however, it actually was a bit of moderation in growth rate compared to 2011 and 2012 where we shifted into a slightly lower gear,” he said. “We don’t have the final numbers in yet for real GDP growth for last year, but it is looking like it’s probably going to come in around three per cent
“In 2014, I actually see growth picking up a little bit, maybe to around 3.5 to 3.8 per cent GDP.”
