Economic Trends

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

Chart 1: Rising energy prices lifting consumer inflation - year-over-year change in Consumer Price Index
Source: Statistics Canada

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

Chart 2: Crude by rail exports surge to record high - Canadian crude oil exports by rail
Source: National Energy Board

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.

Outside Alberta

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.

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Contact

Contact for Economic Trends

Kathleen Macaspac, Manager, Macroeconomic Forecasting
Alberta Treasury Board and Finance

Phone: 780-427-8841
Toll free: 310-0000 before the phone number (in Alberta)
Email: kathleen.macaspac@gov.ab.ca