In-depth analysis of recent developments in Alberta’s economy.
Latest Economic Trends
Download the complete report: Economic Trends (July 2018)
Published August 2, 2018 (PDF, 255 KB)
See below for highlights from the publication.
July 2018 economic trends
- Business output in Alberta continues to pick up amid higher oil prices, growing oil production and robust growth in the US.
- The value of goods exports is approaching pre-recession levels, while resale housing activity is improving after weakness earlier in the year.
- Steady job gains have also led to a steady improvement in the unemployment rate.
- However, solid business activity has yet to translate into renewed construction spending in the private sector, which continues to lag.
Alberta household sector
Goods sector lifts employment
- Alberta’s labour market continues to advance, albeit at a more sedate pace.
- Job gains have moderated, with the province adding an average of 1,300 jobs a month in the first half of the year, compared with an average monthly gain of 4,600 overall in 2017.
Resale activity improving
- The resale housing market is showing signs of improvement.
- Both home sales (+2.8%) and the average resale price (+1.3%) ticked up for the second month in a row in June.
- The improvements came on the heels of slumping sales and prices in the first 4 months of 2018, spurred by mortgage rule changes that took effect in January.
Energy prices drive inflation higher
- Consumer inflation has accelerated with higher energy prices.
- Alberta’s inflation rate rose to 2.8% in June, the highest level since October 2014.
- The increase has been driven by gasoline prices, which have surged over the last 12 months from about $0.90/liter to more than $1.25/liter in June and were just below the 2008 highs.
- Electricity prices have also risen and are up more than 23% from a year ago.
- Excluding energy, inflation remains contained at 1.5% (Chart 1).
Chart 1: Rising energy prices lifting consumer inflation
Year-over-year change in Consumer Price Index
Alberta Business Sector
Broad-based strength in business activity
- Business output in the province has bounced back, following temporary softness earlier in the year.
- Growing oil production and higher oil prices pushed the value of energy exports close to a 3-year high of $7.2 billion in May.
Resurgence in crude by rail
- With crude oil production exceeding pipeline takeaway capacity, oil producers have increasingly utilized railcars to transport their output to refinery markets across North America.
- Exports of crude by rail set a new record of nearly 199 thousand barrels per day (bpd) in May, up over 50% from last year (Chart 2).
Chart 2: Crude by rail exports surge to record high
Canadian crude oil exports by rail
Ongoing weakness in private sector non-residential construction spending
- Solid business activity in the province has yet to translate into renewed construction spending in the private sector.
- Investment in non-residential building construction continues to be weighed down by weakness in commercial structures, which has fallen to the lowest level since the third quarter of 2010.
US economy outperforms
- After a relatively modest start to the year, the US economy regained momentum in the second quarter of 2018.
- US real GDP grew at an annualized rate of 4.1%, reflecting robust growth in consumer spending, business investment and exports.
- In contrast, while growth in many advanced and emerging market economies remains solid, it has slowed, pointing to a less synchronized global expansion.
- This divergence has emerged amid rising US interest rates, stronger oil prices and increased trade uncertainties.
Currencies weaken against USD
- The strength of the US economy vis‑à‑vis other economies and a faster pace of monetary tightening in the US have contributed to the strengthening of the US dollar.
- The trade-weighted exchange rate for the US dollar has appreciated over 5.5% since mid-April.
- June 2018: Economic Trends (PDF, 423 KB)
- InFocus: Are we there yet?
- May 2018: Alberta economy maintaining momentum despite moderation in some parts (PDF, 292 KB)
- InFocus: Alberta 2017 economic rebound
- April 2018: Recovery in the Alberta economy has lasted well into the new year (PDF, 232 KB)
- InFocus: Energy's contribution to the economy
- March 2018: Economic Outlook released with Budget 2018 (PDF, 307 KB)
- February 2018: 2017-18 3rd Quarter Fiscal Update and Economic Statement (PDF, 512 KB)
- January 2018: Recovery continues to broaden across Alberta's economy (PDF, 382 KB)
- InFocus: Crude oil market rebalancing in 2017
Issues prior to 2018
Economic Trends Archive (March 2012 to current)
These newsletters focus on a particular theme related to the Alberta economy and are published occasionally.
- A Year in Review (2017) - Post-recession Liftoff (March 12, 2018) (PDF, 308 KB)
Issues prior to 2018
- Economic Spotlights Archive (2000 to current)
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Contact for Economic Trends
Kathleen Macaspac, Manager, Macroeconomic Forecasting
Alberta Treasury Board and Finance