October 19, 2022

Bracing for impact: Alberta to weather upcoming economic storm well

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 Fall 2022—Key Insights

In our previous update, we reported that Alberta was making a promising comeback. And while global economic forecasts are lower this time, Alberta is poised to make it through intact and with strength.

Maintaining the Growth: The good news is that Alberta’s economy continues to perform well. Alberta’s food producers are bracing for a near record harvest, and high commodity prices are fueling economic activity. Also positive is the major recent investments in the province and continued positive trend in interprovincial migration. Overall, despite a muted forecast for economic growth, Alberta is still predicted to be among Canada’s growth leaders this year and next.

Riding the Wave: However, inflation, interest rates, and global instability rear their ugly heads and a recession may be on the way. Even though labour markets remain tight, wage growth in Alberta has been slow, and Albertans will feel the impact of low wage growth and rising prices. While Alberta is poised to buoy these impacts, there are still key challenges on the horizon, and the global economic outlook appears clouded as Alberta prepares to weather the coming storm.

Report Highlights:

Alberta’s economy will still be the biggest that it has ever been and will lead the nation in growth. Alberta producers are predicted to have near record harvests, more Canadians are moving to Alberta, and several significant new investment announcements outside of the energy sector are a sign of economic strength and diversification in Alberta. Not only is the Alberta economy continuing to perform well, but forecasts also show the province among Canada’s growth leaders this year and next.

Growth is slowing globally, but we can weather the storm. Economic conditions in Alberta are strong for now, despite global headwinds like rising interest rates, inflation, and geopolitical uncertainty. While high global commodity prices are among the factors fueling inflation, Alberta is uniquely positioned to benefit from their effects.

Inflation has become a double-edged sword for Albertans. High oil and gas prices have dramatically improved the fiscal situation in Alberta but when coupled with the weakest wage growth in the country across the last two years, inflation is hitting harder in Alberta than elsewhere in the country, and price increases continue to chip away at affordability. 

Labour shortages are endemic. Alberta’s unemployment rate, while lower than it has been, continues to fluctuate, and labour shortages in the province have become endemic. Ten percent of Canada’s one million unfilled jobs are found in Alberta, and mismatched skills and declining productivity are putting businesses in a tough spot as cost of labour continues to rise.

The global economic outlook is clouded with uncertainty. The OECD’s September Economic Outlook Interim Report lowered its 2023 real GDP growth forecasts across much of the G20, largely a result of increased energy and food prices, and central banks raising interest rates to reduce broader inflationary pressures. While Alberta is expected to weather the storm well, the global outlook remains clouded.

If you would like to use this report in a publication, please use the following citation.

Business Council of Alberta. Fall 2022.
Alberta Snapshot: A Quarterly Economic Update for Alberta.

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