A Quarterly Economic Update
A quarterly economic overview, the Alberta Snapshot helps you make sense of where Alberta’s economy is headed.
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.
Explore the latest update through the graphs below or by downloading the report below.
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In our previous update, we reported Alberta was poised for the biggest turnaround in economic growth in Canada, and coming into Summer 2022, the Alberta economy is the largest it has ever been, surpassing the 2014 high watermark—but some conditions apply.
The Comeback: Alberta leads the country in private sector employment growth and will exceed the 2014 level of economic activity. Commodity prices reached an 8-year high and have driven a major inflow of revenue into the province. Additionally, optimism about the future is high as more people have moved to Alberta than left and businesses expect to expand operations and increase hiring.
The Conditions: However, inflation is the number one issue for consumers and businesses, and Canadian expect inflation to last another 1-2 years. Albertans face additional inflationary challenges: Prices have increased 10% since COVID, yet wages have increased just 4-5%—well below many other provinces. And interest rate increases could put recent home buyers in a vulnerable place. The conditions are primed to see wage growth pressure.
- Several indicators show Alberta’s economy is the largest on record: Forecasts project Alberta to regain 2014 levels of economic activity. Commodity prices have hit a near-decade high and provincial revenues are in excellent shape. Additionally, Alberta leads the nation in job creation in the private sector, which is typically a sign of strong economic recovery.
- This comeback comes with a few conditions, however. While commodity prices and revenue inflows are high, capital investment in oil and gas is not what we have seen in the past. Businesses expect to spend just 40% of this revenue on investment, compared to 149% at similar prices in 2013. Additionally, start-up activity across Canada has been depressed, and Alberta has 1,400 fewer businesses than it did pre-COVID.
- Inflation is top of mind for consumers and businesses. Canadian believe that inflation will persist for another year or two, and interest rates increases designed to fight inflation could leave recent home buyers vulnerable. Albertans face additional pressure as the province has a lower wage growth than other provinces, meaning that inflation is eating up more of Albertans’ household budgets.
- Labour shortages are still a key challenge for businesses. Alberta’s unemployment rate is low, and the workforce is ageing, which means Alberta’s excess labour capacity is waning. The good news is that for the third consecutive quarter, more people moved to the province than left, which could be good for Alberta businesses needing additional labour to meet consumer demand.
- The global economic outlook is muted. The OECD revised its growth expectations to 3%, compared to 4.5% in December 2020, due mainly to the war in Ukraine and high commodity prices. In Canada, economic recovery continues more slowly, and the consequences of inflation and labour shortages have led banks to predict a mild recession in 2023.
If you would like to use this report in a publication, please use the following citation.
Business Council of Alberta. Summer 2022.
Alberta Snapshot: A Quarterly Economic Update.
Download Summer 2022 Snapshot
Alberta’s labour market is stronger than it’s been in years
Doubling the gains of the previous quarter, about 46,000 more Albertans are working than in March. This leaves the unemployment rate at 4.9%, a rate not seen in over 5 years. Furthermore, the recent uptick in hiring was across a broad range of industries: e.g., professional services, transportation, and finance. Overall, the stronger labour market has benefited men and women of all ages. The only group less likely to be working is older men.
Inflation is taking a bite out of wages
The top concern among Canadians is inflation. Albertans, however, are not only facing higher prices, but they are also seeing little increase in wages. While prices have increased 10% since COVID, wages have increased just 4-5%—well below many other provinces, though it has improved some over the last few months. As more consumers expect higher inflation to last, they plan to cut spending. Meanwhile, businesses expect inflation to become a focal point in wage negotiations, especially in restaurants and hotels, and manufacturing industries.
Alberta expected to return to 2014 levels of GDP but not prosperity
While Alberta is enjoying a strong recovery, it is important to note the difference versus previous booms. First, though all bank forecasts show Alberta surpassing 2014 levels of economic activity this year, this does not factor in population growth over that time. Per capita GDP (a proxy for income) will only reach 2019 levels by 2023, at which point they’ll still lag 2014 levels by 5% or about $5,000 per person.
Global prosperity is weighed down by war in Ukraine
Similar to the interim report published in March, the OECD’s June Outlook expects growth of 3% this year (versus 4.5% forecast in December) and inflation of 9% across OECD countries (double previous expectations). The main culprit is the war and related rise in commodity prices. Countries with limited ties to Ukraine or Russia and that benefit from high resource prices, like Canada, will not fare as badly as others, bringing a focus to food and energy security.
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