Sunday, February 1, 2009

Making the numbers look good

I had a look at the presentation the Edmonton Economic Development Corporation gave to Edmonton Realtors earlier this month.

Edmonton's Economic Future 2009

Slide 7

"Drop in house prices, but increase in MLS sales
(year over year)"

False: Sales dropped 15% from 20,544 in 2007 down to 17,371 in 2008.

Slide 11

Shows cumulative GDP growth starting in 1989. Note that all the lines shoot up soon after 2009 in an optimistic forecast but there is no line indicating when real data ends and cheer leading begins.

Slide 15

There is a table with the following information.

"Major Projects
Alberta Major Projects - 2009
(millions $)

Total Alberta Major

Alberta Oil and Gas $7,882
Alberta Oilsands $163,203
Projects delayed $98,600

Value of projects

The information comes from the Alberta government website. In this presentation it is listed as "Major Projects 2009". From the source they describe these numbers
This Inventory lists projects in Alberta, valued at $5 million or greater, that have recently been completed, are currently under construction, or are proposed to start construction within two years. Not all projects over this threshold are listed, due to reasons of confidentiality and/or due to information not being available at the time of printing.
The numbers themselves are impressive so in the presentation they go. Everyone knows that projects have been "delayed" so it would need to appear that they have accounted for it. Why does the title say 2009 projects? Why didn't they account for projects completed or nearing completion as well?

An article came out today Upgrader Alley projects toppling like dominoes.
But at BA Energy's construction site, giant vessels now lay strewn about a windswept field like toppled dominoes, half-buried in snow.

Costing more than half-a-billion dollars to build, the specially designed technological marvels were transported from far-off places such as South Korea and left here to rust.
The only upgrade moving forward going into 2009 is Shell Scotford. In the list of major projects this one accounts for 22 billion dollars with this description
Proposed for 2009 - 2012 (phase 1). Four additional upgrading trains. Application filed July 2007. Estimated cost range $22B to $27B.
As we have seen there is a big difference between phase I of a 22 billion dollars being proposed for the next 3 years compared to all the 22 billion dollars being included in 2009.

But the numbers look nice.

Slide 23

Shows GDP numbers, estimates and forecast, from the Conference Board of Canada.

Shows Edmonton at 1.8% this year and a optimistic 2.4% in 2009. This has been a moving target. Last year the Conference Board had forecast 4% growth in Edmonton for 2008. Source.

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