Among the several metrics that illustrate the relative strength of the Alberta economy, the one that stands head and shoulders above the rest is the tightness of the labour market. This is clearly reflected by the very low job vacancy rate at the end of March in the Wild Rose Province.
According to Stats Canada, there were fewer than two (1.8) unemployed persons per vacant job position in the province compared to 5.8 for the country as a whole and 2.8 in neighboring Saskatchewan, the second tightest labour market in the country.
This evidence of strong labour demand is also reflected in the province’s very low (4.5%) unemployment rate. In May, the jobless rate in the province fell to a 42-month low of 4.5% compared to the national rate of 7.3%.
Based on recent population data, it is clear that Alberta’s very strong appetite for labour is attracting workers from other provinces and also from outside the country.
According to Statistics Canada, migration from all sources totaled 22,066 in the first quarter of this year, the largest inflow since Q3/2006. Consistent with the relative strength of labour demand in the province, weekly earnings in Alberta averaged $1057 in March, 19% above the national average of $888.
Driven by the strong pattern of population growth, solid gains in weekly earnings and against a background of very low interest rates, retail sales in the province are up 7.8% y/y in April, twice the increase for the country as a whole.
At the same time, year-to-date sales of existing homes in the province are ahead by 17.4%, well above the nation-wide year-to-date gain of 7%.
By far the major contributor to Alberta’s overall economic health, the energy sector, promises to continue to help fuel the province’s growth through the remainder of 2012 and well into 2013.
This prospect is based on the results of the most recent Statistics Canada Survey of Investment Intentions which reported that private and public organizations planned to increase their investment in construction and machinery and equipment by $7.9 billion in 2012. That’s more than twice the amount they planned to increase their spending by at the beginning of 2011.
Moreover, the vast majority (85%) of this planned investment is on oil and gas extraction including Dover Operating Corp’s Commercial Project, the third phase of Devon Canada’s Jackfish oil sands project and Cenovus Energy Inc’s Foster Creek oil sands project.
Looking forward, during the remainder of 2012 and throughout 2013, the outlook for the Alberta economy is very solid due to sustained growth of business investment, a gradual expansion of consumer spending and housing demand driven by strong job growth and net migration. These factors will also be augmented by a steady expansion of external demand for the province’s resources.
Following a gain of 5.2% in 2011, the Alberta economy should exhibit growth in the range of 3.8% to 4.4% in 2012 and 2013.
Gross Domestic Product (GDP) Growth - Alberta vs Total Canada