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.
Alberta Snapshot Spring 2021—Key Insights
In our previous two snapshots, we expressed uncertainty around the potential long-term and structural impacts of COVID on the economy, including mass bankruptcies, permanent shifts in consumer behaviour, and labour force scarring due to individuals out of the workforce for long periods of time.
However, there is good news: thanks to unprecedented levels of government support and the resiliency of Albertans, this has not come to fruition. In fact, in Alberta:
- Consumer and business bankruptcies are low.
- More businesses are opening or reopening than the number closing (as of the latest data available).
- Albertans’ spending seems to reflect short-term responses to the virus and restrictions, as opposed to permanent shifts in behaviour. The economic crisis is the virus, rather than structural.
- Alberta’s business leaders plan to hire more workers and invest more in the coming year.
The natural resource industry is in recovery too: the housing boom has increased prices for Alberta’s forest products; agriculture production has been very high; and though uncertainty remains, energy prices are strong with supply restraint by OPEC+ and growth in demand as the world becomes more mobile.
However, rising cases and emerging variants give cause for concern and uncertainty, impacting most those businesses already hard-hit by the pandemic—restaurants, hotels, airlines, and other close-contact services. Given the relative strength of other segments of the economy, close-contact services and education should be the utmost focus for the immediate term, especially given that low-income Albertans tend to be most affected.
Vaccination uptake, risk mitigation, and targeted income support will be the most fundamental policy levers over the next year so businesses can reopen more fully, kids can learn, and Albertans can get to work.
Broadly, employment in Alberta is looking up. Employment in resource sectors has recovered with the resurgence of strong energy prices, but employment in hard-hit service sectors remains 30% below pre-COVID levels. The biggest labour force concern is the increase in long-term unemployment among Albertans.
Some forward-looking signals are positive: Alberta businesses have avoided the mass closures that were initially feared, and businesses continued to open or re-open. Additionally, the sales and investment outlooks from Alberta business leaders are increasingly positive. More business leaders expect to invest in machinery and equipment, which is a key leading indicator for economic growth.
New manufacturing orders indicate that, while close-contact services continue to be hard hit, demand for goods is strong. Albertans are continuing to spend, with retail sales up 5% in January compared to a year ago. What Albertans spend on, however, has changed with being home more—and not all industries are experiencing a bounce back in sales (e.g., hair salons, restaurants, airlines).
Even though the way out of the crisis is becoming increasingly clear, rising COVID cases and emerging variants create cause for concern in the short term. Vaccination uptake, risk mitigation, and targeted income support for Canadians and businesses will be important over the next few years as Canada navigates its way back to public and economic health.
If you would like to use this report in a publication, please use the following citation.
Business Council of Alberta. Spring 2021.
Alberta Snapshot: A Quarterly Economic Update for Alberta.