Advocacy

January 23, 2024

Population growth and investment are putting gas in Alberta’s tank, even as the country sputters to a halt, says Alberta economists  

January 23, 2024 

Latest economic report from the Business Council of Alberta shows that while the provincial economy is expected to soften this year, strong investment, population growth, and renewed vitality in the energy sector puts Alberta in a strong position nationally 

CALGARY, ALBERTA—The latest quarterly economic report from the Business Council of Alberta, released today, found that Alberta is starting 2024 in a position of relative strength compared to the rest of Canada, and is once again, forecasted to be among the national leaders in economic growth. 

This strength is underpinned by Alberta’s outperformance in several areas including: 

  • Population growth: Due to the province’s surge in population growth, the economy is expected to be 7-9% bigger in 2025 than in 2019. 
  • Renewed vitality in the resources sector: The sector added 17,000 jobs to the economy in 2023, offsetting the loss of thousands of professional services jobs; and production was at a record high in 2023.  
  • Strong residential and capital investment: In response to support population growth, companies are investing heavily in residential construction (this investment is still well below 2021 levels, however). Additionally, capital investment in major projects Dow’s Path2Zero, Pathways Alliance’s Carbon Capture Storage Hubs, and the soon-to-be operational Trans Mountain Pipeline—are expected to boost growth.   

“What we’re seeing is that Alberta is the top of the bottom,” says Mike Holden, Chief Economist at the Business Council of Alberta. “Alberta’s economy will lead Canada again this year, but Canada’s economy overall we expect to be very weak in terms of growth.” 

The report also finds that despite this strength, Alberta will also not be immune to the effects of a weakening national and global economy and will feel the impact of a potential recession, albeit not as harshly as the rest of Canadians. 

Some areas of concern include:  

  • Growth expectations: As higher interest rates continue to take hold, the global and national outlook is dim with supply chains signaling weak demand for several months. Canada’s GDP fell by 1.1% (at annualized rates) in the third quarter of 2023, and growth is expected to worsen. 
  • Business expectations: While still positive, Alberta businesses have moderated their expectations for the future. The challenge has shifted from meeting high demand to weaker revenue expectations in the future. And because business leaders expect to cut back on hiring, job vacancies have dipped, and the labour market has softened.  
  • Cost of living: The cost of living remains a tough challenge for all Canadians, and many are still struggling to pay bills and manage debt; however, these financial challenges do not appear to be as severe in Alberta, where wages are growing. 

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