First, let me apologize for my usual lengthy blog. I can't help it, I just love the sound of my written voice. If you just want the synopsis, feel free to skip ahead to the end - but then you'll miss my witty Star Trek remark. Okay, what's happening out there?

Well let's have a look at a few statistics. And what better place to start than Statistics Canada? According to Stats Can commercial rents have been rising in Canada steadily over the last four years however the last few quarters have seen a slight leveling off of the rate of the rise, rising only 0.1% in the third quarter of 2011, preceded by a 0.6% rise in the second quarter.

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The first graph is of commercial rents over the last four years. On a year over year basis the index advanced 1.6% from third quarter 2010 to third quarter 2011. The second graph is for commercial and industrial machinery and equipment rental and leasing rates and it shows a different story. These rates have been dropping steadily since the peak in 2007 but seem to have bottomed out and are on the rise again. Heavy machinery (construction, transportation, forestry, mining) rose 0.5% which shows some strength in those sectors while office and other commercial equipment leasing rates dropped 0.1% showing a little weakness but not really anything of note. These are seasonally unadjusted rates so this is the raw data, and Stats Can may revise it when fourth quarter results come out

 Hopefully you can read this chart above, but basically it has some Canadian economic indicators.. Gross Domestic Product (GDP) rose by 1.1% from Q2 2011 to Q3 2011 to $1721B. Real GDP (inflation adjusted) was a rise of only 0.9%, still a respectable number while business investment dropped 2.9% (Ouch).

Our personal expenditures on consumer goods and services rose 0.3% while personal disposable income neither rose nor fell.

On a year over year basis the numbers look much better with GDP up a very healthy 5.9%, 2.4% (still healthy) after inflation. On a year over year (Y/Y) basis business investment is up a very nice 9.2% while personal expenditures are up 1.9% and disposable income (except mine) up 3.1%.

So what are Alberta's economic numbers? (NOTE: The time periods for the following numbers vary, but all are within a month or so of December 2011) Well our total employment went up 0.1% for the quarter and 3.9% Y/Y (Q3 2011 - Q3 2010) with a very healthy participation rate (percent of all persons within a specified age range working) 74.1% which is a rise of 0.9% over last year.

Our average weekly earnings in Alberta rose 4.96% year over year while consumer prices rose 2.9%. Retail demand rose a lovely 8.3% Y/Y. Manufacturing rose 23% Y/Y and building permits (music to my ears) rose a whopping 50.6%!

Government Spending

When we look at the spending habits of the Government of Canada, we see a bit of a different picture. Revenue up to Q3 2011 was up 6.1% while expenditures were only up 3.3% indicating revenues are increasing faster than spending. This is good but TOTAL expenditures exceeded revenue by a whopping $47.7 Billion dollars so as far as government goes it is situation normal.

Analysis Mr. Spock

Sorry couldn't resist a little Trekkie humour. Okay I won't bore you with any more statistics. What is happening? Basically it looks like Canada, and particularly Alberta is healthy. In fact, here in Alberta we are on a bit of a tear. Why? Well oil prices are healthy and oil still is a large part of our provincial economy. As well, Canada and Alberta have managed our finances much better than the rest of the world has. Now that doesn't say much. The rest of the world is a pretty poor measuring stick for financial management, but at least we are quite healthy financially...for the moment. A recent report showed that average Canadians now have more household debt than the average American (I can't recall the source but it was probably either Stats Can or CMHC). This is alarming. Most likely it is a combination of two things; Americans are broke and therefore spending less while Canadians are not yet broke so we are spending more in an effort to catch up to our American friends.

And speaking of our American friends, their federal government hasn't learned to control spending yet. They continue with "new rounds of quantitative easing" (that means they are still spending like drunken sailors) but rising economic indicators show that perhaps (perhaps, not for sure) they are beginning the long, slow climb out of their economic woes. And let us not forget Europe. They have their own economic troubles proportionate to the United States.

Finally, My Synopsis

Things look good for Canada and particularly Alberta for the foreseeable future (the foreseeable future is maybe a year) but we still have two large elephants in the room named USA and Europe. Their problems are too large to go away in a short period of time and they will likely be a drag on our economic growth for some time. After all, it's not how many goods you make, it's how many you sell, and if they aren't buying, we aren't selling. I believe the US is at or near it's economic bottom, but the climb out is going to be long and slow.

Alberta is likely to be a great place to invest and live for some time yet as well as Canada as a whole. The US is also a great place to invest in real estate, but for a different reason - bargain basement prices. It is a large, highly entrepreneurial country and once they clean the rascals out of high places, it will return to being a powerhouse. It is a warm country with a high standard of living and a great place for Canadians to own real estate.

BUT wherever you invest, I urge caution. If you have large amounts to invest, doing it slowly over time by buying properties one at a time will spread your risk. If the economy suddenly shoots up, the downside is you lost some potential gain, but I think prudence is the objective of the day. Get in the market but get in wisely.

And of course, my usual disclaimer. Don't go investing all your money in Florida because of this blog. Always always consult your real estate professional as well as your tax accountant and lawyer before making any big financial decisions.