Economic Trends

In-depth analysis of recent developments in Alberta’s economy.

Latest Economic Trends

Download the complete report: Economic Trends (June 2018)
Published June 29, 2018 (PDF, 423 KB)

See below for highlights from the publication.

June 2018 economic trends

  • Alberta’s labour market continues to adjust amid a pickup in population growth.
  • Modest job gains so far this year have been underpinned by continued rotation to full-time work.
  • The unemployment rate has come down to a 2-year low.
  • Year-over-year growth in goods exports has moderated from last year’s pace but remains solid, with non-energy exports providing some lift.
  • A record level of farm cash receipts in 2017 bodes well for the agricultural sector, while direct international visits into Alberta are boosting the tourism sector.

Alberta household sector

Population growth picking up

  • Alberta’s population continues to grow at a faster rate. It rose to 4,334,025 as of April 1, 2018, an increase of 15,253 (+0.35%) from the previous quarter.
  • On a year-over-year (y/y) basis, growth accelerated from a low of 1.2% in the same quarter last year to 1.4% as net interprovincial migration continued to pick up.

Underlying labour market strength

  • The labour market continues to improve despite modest gains in headline employment.
  • Though the economy has added only 5,800 jobs since the beginning of the year, full-time positions have increased by more than 29,000 (Chart 1).

Chart 1: Modest job gains driven by continued rotation to full-time work
Alberta employment (seasonally adjusted)

Chart 1: Modest job gains driven by continued rotation to full-time work - Alberta employment (seasonally adjusted).
Source: Statistics Canada

Resale housing market adjusting

  • Home sales in the province appear to be levelling off as the initial impact of new mortgage rules on activity is starting to fade.
  • While sales have stabilized at lower levels after slumping in the first quarter, new listings continued to move higher.

Alberta Business Sector

Non-energy sales buoy merchandise exports

  • Merchandise exports remain solid despite wild swings earlier in the year.
  • The value of goods exports was up 6.3% year-to-date (YTD) in April.
  • Though energy exports eased from January’s three-year high, they were up 5.7% YTD.
  • Building off a 26% surge in March, exports of non-energy products reached a record level in April (Chart 2).

Chart 2: Non-energy goods exports have risen to reach an all-time high
Value of non-energy merchandise exports in Alberta

Chart 2: Non-energy goods exports have risen to reach an all-time high - Value of non-energy merchandise exports in Alberta.
Source: Statistics Canada

Light-heavy differential remains volatile

  • Limited pipeline and rail takeaway capacity amidst growing production in Western Canada has caused the light-heavy (WTI-WCS) differential to be particularly volatile.
  • Following a pipeline outage in late 2017, the differential widened to a 4-year high, averaging $26/bbl in the first quarter due to insufficient rail availability to move Western Canadian crude to export markets.

Farm income remains strong

  • Alberta farmers continue to enjoy healthy farm incomes.
  • 2017 was a record year for net cash income, realized net income and farm cash receipts.
  • The province’s agricultural sector posted annual farm cash receipts exceeding $14 billion for the first time, up 4.5% from 2016.

Solid direct visits boost tourism

  • Alberta’s tourism sector continues to get a lift from solid levels of direct international visits.
  • Over 214,000 tourists from the US and other countries entered the province in the first 4 months of 2018, up 4.7% from the same period last year.

Outside Alberta

OPEC to raise output

  • OPEC and other major producers have agreed to boost production amid robust global oil demand and tightening supply.
  • OPEC and its allies are set to increase output by up to 1 million barrels per day after an 18-month pact to restrict crude oil supply.

US tariffs, NAFTA weigh on Loonie

  • The Canadian dollar is coming under pressure due to increased trade-related uncertainties.
  • In June, the Canadian dollar fell to around US¢75/Cdn$ after averaging almost US¢78/Cdn$ in May.

Latest InFocus

Download the complete report: InFocus (June 2018)
Published June 29, 2018 (PDF, 423 KB)

The InFocus section covers a relevant economic topic in more depth. See below for highlights.

Are we there yet?

This inFocus is part 1 in a 3-part series exploring the province’s most recent recession and recovery. Part 1 focuses on where we are in the current recovery, while parts 2 and 3 will look at this downturn and recovery in the context of past cycles.

Closing in on previous peak

  • Alberta’s economy is 2 years into recovery from one of the worst recessions on record.
  • According to the Alberta Activity Index (AAX), aggregate provincial activity has regained about 80% of peak-to-trough losses as of April.
  • Behind the solid rebound in the headline indicator, the recovery has been uneven, with some segments of the economy further along than others (Chart 3).
  • While retail sales and employment are fully recovered (Chart 4), many economic indicators have further to go.

Chart 3: Some indicators already recovered
% of recession losses regained to date in Alberta indicators, seasonally adjusted

Chart 3: Some indicators already recovered - % of recession losses regained to date in Alberta indicators, seasonally adjusted.
Source: Statistics Canada, Alberta Treasury Board and Finance, Alberta Energy Regulator, Canada Mortage and Housing Corporation

Chart 4: Retail sales and employment fully recovered
Alberta indicators, seasonally adjusted

Chart 4: Retail sales and employment fully recovered - Alberta indicators, seasonally adjusted.
Source: Statistics Canada

Quick recovery in retail sales

  • The first major economic indicator to recover its recessionary losses was retail sales, which reached new highs in May 2017.
  • A substantial increase in sales at new vehicle dealerships spurred the rapid recovery.

Headline employment recovered

  • Employment surpassed its prerecession peak in December 2017, 6 months after retail sales recovered.
  • Employment has been supported by the service sector, which was mostly unaffected by the recession and continued to expand throughout 2015 and 2016.
  • Ongoing slack in the labour market kept wages flat well into 2017. This, along with a slow recovery in goods sector employment, delayed the recovery in average weekly earnings (AWE).
  • AWE didn’t start to pickup until last spring (Chart 5). It has regained just over 2/3 of peak-to-trough losses.

Chart 5: Lagging recovery in goods sector jobs weighs on earnings
Alberta labour market indicators, seasonally adjusted

Chart 5: Lagging recovery in goods sector jobs weighs on earnings - Alberta labour market indicators, seasonally adjusted.
Source: Statistics Canada

Exports on track

  • The value of Alberta goods exports is well on its way to recovery, having regained nearly 80% of peak-to-trough losses.
  • Energy-product exports were hit especially hard by the recession and have played an important role in the recovery (Chart 6).

Chart 6: Energy exports boost recovery
Alberta goods exports, seasonally adjusted

Chart 6: Energy exports boost recovery - Alberta goods exports, seasonally adjusted.
Source: Statistics Canada

Drilling comeback

  • Metres drilled for oil and gas in the province have regained about 60% of peak-to-trough losses.
  • Since bottoming out in February 2016, global benchmark oil prices have improved.

Investment lagging

  • Like oil sands investment, investment in commercial projects remains subdued.
  • Fortunately, after providing a welcomed buffer during the recession, public sector construction spending continues to counteract weakness in other areas.

Housing market soft

  • New mortgage rules and rising interest rates have dampened Alberta housing activity.
  • Alberta housing starts have recovered just half of peak-to-trough losses, while Alberta’s resale housing market remains subdued.

Archive

2018

Issues prior to 2018

Economic Trends Archive (March 2012 to current)

Economic Spotlights

These newsletters focus on a particular theme related to the Alberta economy and are published occasionally.

2018

Issues prior to 2018

Sign up for updates

Subscribe to get our economic publications by email

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

Contacts for InFocus

April Seburn, Economist
Alberta Treasury Board and Finance

Phone: 780-427-7543
Toll free: 310-0000 before the phone number (in Alberta)
Email: april.seburn@gov.ab.ca

Robert Van Blyderveen, Economist
Alberta Treasury Board and Finance

Phone: 780-638-5628
Toll free: 310-0000 before the phone number (in Alberta)
Email: robert.vanblyderveen@gov.ab.ca