Alberta has seen the strongest employment growth of all large provinces and is forecast to lead in economic growth as well. Alberta economy is again the strongest in Canada – growing and creating jobs – but it is also feeling the pressures of a rapidly expanding population increasing unemployment rates and housing costs.
While resilient, Alberta has not escaped weak trends globally or nationally. The labour market is softening, unemployment has more than ticked up, and Albertans are feeling less confident in the economy and their financial position. However, expected rate cuts could provide relief soon.
Despite interest rates, business expectations and intentions are strong. Alberta businesses are among the most optimistic in the country, forward-looking indicators are up even since last quarter, and they intend to continue to spend on capital this year. Further, Alberta is attracting a larger share of venture capital dollars, despite a national dip in overall investment.
Report Highlights:
Alberta’s Job Growth Lead by Private Sector Surge Amid Labor Market Challenges: Over the past year, Alberta’s economy added nearly 70,000 new jobs, with the private sector leading growth at 4.8%, surpassing all other large provinces. Key contributors were industries like resources (+25,000) and hospitality (+21,000). Despite job gains, the labour market is strained by population growth, causing a drop in job vacancies and an increase in unemployment rates, notably in Calgary, now Canada’s highest at 8.1%.
Rapid Growth equals Financial Strain for Albertans: Rapid growth in the province has boosted demand for goods and services, but the housing market can’t keep up, driving rent up 15.7% and home prices higher. Albertans’ wage growth lags behind other provinces, worsening their financial situations, though mortgage arrears and bankruptcies remain low. Spending on clothing, dining out, and sporting goods has dropped, but retailers of home goods, vehicles, and personal care products are thriving due to the population boom.
High Interest Rates and Labor Shortages Challenge Housing Boom: The Canadian economy remains weak, driven only by population growth and consumer spending, with 2024 growth forecasted below 1%. Despite expected cuts by the Bank of Canada, high interest rates will challenge mortgage renewals. Provincial indicators show resilience with increased wholesale trade and rising energy exports. Residential construction is strong, especially in Edmonton and Calgary, but labour shortages and financing costs may slow progress.
Global Economic Optimism Amid Easing Rates : The GEP global supply chain index improved in May due to higher commodity demand, indicating a positive economic outlook. Despite high interest rates, the global economy is stable, reducing recession fears. Central banks, including Canada’s, are easing rates as inflation and labor markets stabilize. Key inflationary prospects remain in oil prices, housing demand, and wages. Global growth for 2024 is forecasted at 3.2%, below the 3.8% historical average, with Canada expecting the least growth among G7 nations and a second year of declining wealth.
Provincial Growth Forecasted to Lead Nation Despite Labor Shortages and Sectoral Challenges : Alberta’s growth was 1.5% last year, coming in lower than expectations, but is forecasted to reach 1.7% this year and 2.5% next year – topping all large provinces. Oil production is key to this growth, though per capita growth will be negative due to population increases. Business outlooks are highly positive, with improved conditions and financing access, though labour shortages remain a concern. Optimism is somewhat lower in oil, gas, and agriculture sectors due to inflation and rising costs.
If you would like to use this report in a publication, please use the following citation.
Business Council of Alberta. Summer 2024.
Alberta Snapshot: A Quarterly Economic Update for Alberta.
Background:
We know there is so much economic data and information out there, and that you want a way to see it all in a snapshot with a view looking forward and not just back. That’s why we created the Alberta Snapshot, a quarterly executive summary that helps you keep the pulse on what is happening in Alberta’s economy—the good, bad, and urgent.
We use a wide and diverse range of indicators including data on jobs, consumer spending and debt, business openings and closings, population growth, economic forecasts, and more to assess and synthesize economic activity, business conditions, and social well-being in a way that is meaningful to Albertans and Alberta businesses.