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 PDF report.
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The Alberta economy continues to struggle along the long and bumpy road to recovery. Labour market conditions deteriorated in the last two months of 2020, even before the most recent shutdown took place, and Alberta is falling behind provinces. Our job recovery is lagging Canada overall, unemployment remains high, and Albertans are more likely than other Canadians to be experiencing prolonged stretches of joblessness.
Additionally, there are some other concerning signs for the province’s economic recovery: an uptick in bankruptcies, weakness in new manufacturing orders and capital investment, and a steep decline in immigration which has been an economic growth driver across Canada. Many of these impacts may be magnified by restrictions in response to high COVID cases implemented in December.
The silver lining is that Albertans remain resilient and are showing confidence in their future outlook. Consumer spending remains strong, more businesses are opening than are closing, and our latest Alberta Business Expectations Survey shows an improved outlook for business investment.
Economic recovery will not be easy but is within reach through speedy vaccination, continued support for businesses and individuals, and renewed investment in lost physical and human capital. The good news is vaccine rollouts have already begun and, while we have concerns that Canada may lag the U.S. and other countries in achieving herd immunity, the province and the country as a whole are taking action to accelerate vaccine availability for the general public. This will allow Alberta to begin the long process of rebuilding the economy, restoring capital investment and getting people back to work.
- As of December, Alberta’s unemployment rate was the second highest in Canada at 11.0%, and most of Alberta’s unemployed have been out of work for three months or longer (51%)—this is the largest share of all the provinces. This is indicative of a weak economy before COVID and a steeper impact from the pandemic.
- Retail spending in the province was up in October, but a dip in new manufacturing orders and an uptick in bankruptcies provide some cause for concern in recovery.
- Economic forecasts for 2021 move in tandem with virus management and vaccination. This underscores the importance of efforts by provincial and federal governments to accelerate vaccine supply and vaccination programs.
- Some forward-looking signals are more positive: our recent Alberta Business Expectations Survey shows more businesses expect to increase spending on machinery and equipment, which is a key leading indicator for economic growth.
If you would like to use this report in a publication, please use the following citation.
Business Council of Alberta. January 2021.
Alberta Snapshot: A Quarterly Economic Update.
Most unemployed have been out of work for several months
Not only are fewer people back to work in Alberta than other provinces, most of the unemployed have been out of work for three months or more (51%), and 12% have been jobless for at least a year. While Alberta has the 4th highest short-term unemployment rate, it has the 2nd highest rates of both medium- and long-term unemployment. This indicates two issues in Alberta: a weak economy predating COVID as well as a harder impact from the pandemic.
New manufacturing orders decline
In October, the value of new orders coming in dipped back to about 90% of pre-pandemic levels (a 3% decline). Sales data suggest a decline in global travel—and the lower oil prices that followed—may be to blame; transportation equipment and petroleum refining are the biggest losses. Not surprisingly, Alberta continues to be one of the hardest-hit provinces with sales down 13% versus last year.
COVID increases global poverty
The second wave of COVID slowed the global economic recovery; GDP growth for 2020 is now expected to come in at -4.3%. The World Bank’s baseline forecast estimates 4% growth in 2021, which would put the size of the global economy next year at about 5.3% below pre-pandemic levels. Forecasts remain highly uncertain, moving in tandem with virus management and vaccination. However, global poverty is expected to increase for the first time in 20 years.
Key generators of growth still weak
Business investment recovered sharply in Q3 after plunging by 16% in the previous quarter. However, the rebound has primarily come from new residential builds while non-residential and machinery and equipment remain down 15%. This is an important distinction because the latter could improve long-term prosperity while the former will not. One good sign is our recent Alberta Business Expectations Survey shows more businesses expect to increase spending on machinery and equipment.
Explore Deeper: Employment by Province
Use this interactive graph to explore business openings and closing across Canada, including regions and industries.
Click the arrow in the grey bar to expand the graph.
All past issues of the Alberta Snapshot will be available for download below.
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