The transition means Alberta’s economic system will cool from the “lightning tempo” seen in 2022, which was fueled by rising commodity costs, mentioned Adam Legge, president of the Enterprise Council of Alberta.
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The financial storm that hit the Canadian tech sector landed squarely in Alberta this week with layoffs at one of many metropolis’s marquee software program companies.
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Benevity introduced it will cut back its workers by 14 p.c, slicing 137 out of practically 1,000 jobs — the primary main layoffs within the firm’s historical past — as its CEO cited a dramatic change in broader financial circumstances.
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The identical day, the Calgary Development Affiliation raised the alarm about an acute scarcity of expert personnel for its sector. It estimates that greater than 3,000 building jobs within the area are going unfilled as demand for business buildings and new houses will increase, even with rising rates of interest and excessive inflation.
“As we enter 2023, the Alberta economic system is in a state of transition,” the Enterprise Council of Alberta declared in a brand new report launched Thursday.
The transition means Alberta’s economic system will cool off from the “sharpening tempo” seen in 2022, which was fueled by rising commodity costs, board president Adam Legge mentioned.
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Main banks predicted that the provincial economic system expanded by greater than 5 p.c final yr. Some have predicted the nation will enter a recession in 2023, though Alberta is more likely to develop by about two p.c.
“Alberta is finest positioned to face up to any downturn or recession globally or domestically in Canada, largely as a result of we’ve so most of the issues the world will proceed to wish,” Legge mentioned, pointing to vitality and agricultural merchandise.
“However we won’t be immune. No place is an island, and that features Alberta.”
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The report famous that the labor market is stronger than it has been in years — the unemployment charge stood at 5.8 p.c in December — and the current hole between the provincial and Canadian unemployment charges narrowed over the second half of 2022.
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There are roughly 100,000 open positions within the province and roughly 145,000 folks on the lookout for work. Whereas wage progress has been gradual, it’s more likely to speed up, in line with the council’s financial replace.
“Alberta’s labor market is the most well liked it has been in years,” it says.
About six in 10 companies plan so as to add workers (in line with a November survey), however with a labor disaster they must lure staff away from current jobs, the report mentioned.
Staffing shortages have an effect on many companies in industries together with hospitality, skilled companies and manufacturing. That is additionally a problem for the development sector as the prevailing workforce is growing old and never sufficient youthful individuals are getting into the trades.
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Corporations on the entrance traces are on the lookout for expert staff reminiscent of carpenters and electricians.
Scott White, CEO of Calgary-based Western Electrical Administration, mentioned as business building has elevated previously yr, his workers has elevated by 40 per cent.
Main developments within the province are transferring ahead, reminiscent of the corporate’s work on the Calgary conference middle growth, and building within the metropolis’s downtown space has picked up.
“Since April, we have in all probability employed 140 guys and it has been actually arduous to get folks,” White mentioned.
“There’s plenty of issues coming down the pipe and to be trustworthy, I am undecided the place they’ll get all of the folks.”
Different areas of the economic system will probably be affected by a broader slowdown and the pinch of rising rates of interest.
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One sector already going through challenges throughout North America is the tech trade, with large-scale layoffs introduced at giants like Microsoft and Amazon, whereas Canadian companies like Hootsuite, Clearco, Lightspeed Commerce and Clutch minimize workers.
Nic Beique, CEO of Calgary-based on-line funds agency Helcim, mentioned the startup remains to be rising however has slowed a few of its hiring plans for the yr — it has about 150 workers — and famous the trade is turning into extra cautious given the financial uncertainty.
“We’re simply getting ready that we’d see a slowdown; we do not see it within the numbers but,” he mentioned. “Warning is the phrase of 2023 on the subject of expertise.”
Additionally this previous week, Calgary-based cleantech agency Summit Nanotech closed a $67 million fundraising spherical because it expands its workforce and expands its enterprise to extract lithium from brine.
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Benevity, one of many metropolis’s first corporations to obtain a billion-dollar valuation, has been a pacesetter in Calgary’s expertise sector, offering shoppers reminiscent of Visa and UPS with worker engagement software program that allows office giving and volunteer packages make.
The Calgary-based agency, based in 2008, had 989 staff earlier than this week’s announcement, together with 527 within the metropolis.
“All elements of the group had been affected, not simply these inside our Calgary workplace,” CEO Kelly Schmitt mentioned in a press release Thursday.
“Many corporations are tightening budgets in response to the macroeconomic atmosphere, however we imagine the long-term urge for food for corporations to make a social impression stays robust.”
Nevertheless, its announcement is one other signal of the turmoil forward.
Jim Gibson, a veteran of Calgary’s tech sector and now chief catalyst on the Southern Alberta Institute of Expertise (SAIT), mentioned organizations throughout the trade are responding to investor strain and transferring away from the “growth-at-all-costs” mantra.
“It is a part of a shift that is occurring all over the world and Calgary is just not resistant to it,” he mentioned.
“We’ll really feel it, however . . . we weren’t overbuilt, so we can’t see the identical degree.”
Chris Varcoe is a Calgary Herald columnist.
cvarcoe@postmedia.com
