Alberta economy forecast to lead nation next two years

CALGARY – Alberta’s economy is forecast to lead the country this year and next year, according to a report by TD Economics.

The provincial economic update also sees employment growth in Alberta topping Canada for 2012 and 2013 as well.

The TD Economics report predicts Alberta will see Real Gross Domestic Product growth of 2.6 per cent this year and 2.9 per cent in 2013 compared with 1.7 per cent and 2.2 per cent respectively across the country.

Employment growth in the province is forecast to be 1.5 per cent this year and a further 1.8 per cent in 2013 compared with 0.8 per cent and 1.4 per cent respectively across the country.

The positive economic report is good news for business owners in the province like Leah Layden of the Double ELLE Bakery in Calgary who has been open for business in the Ramsay neighbourhood for about a month.

“I’m brand new but the first month has gone well,” said Layden. “I’m the kind of person who likes to do what I want. Takes a risk and does everything I can to make sure it works. I’m not too worried. Certainly I watch my pennies, that’s for sure. I’m aware of what’s happening. I try to keep my costs down. I’m not the kind of person that throws money around, that’s for sure.

“Here in Calgary and in Alberta I think things are going not too bad. Some sectors I’m sure they’re suffering but overall I believe that Alberta and Calgary in particularly is doing quite well just from my observations.”

A recent survey of members by the Canadian Federation of Independent Business showed business confidence and optimism was the highest in Alberta.

“The nation-leading optimism in Alberta is, perhaps, not a surprise,” said Todd Hirsch, senior economist with ATB Financial in Calgary. “Growth in the province has outpaced most of the rest of North America, despite the growing worries in Europe and elsewhere.

“Strong crude oil prices, a good year in agriculture, and an expanding labour market have contributed to a healthy economy. As a result, Alberta’s independent business owners are in a relatively buoyant mood going into 2012.”

TD Economics said Alberta’s current economic momentum “both underscores solid business confidence and solid domestic spending.”

But as European concerns mount in the early stages of 2012 crude oil prices are expected to fall towards $80 per per barrel then rebound towards the $100 mark later in the year, it said.

“In this volatile environment – and with natural gas prices projected to hold at relatively low levels – some projects are likely to be delayed to 2013 or even shelved,” cautioned TD Economics.

That caution is evident to business owners in the province like Layden.

“I did notice that banks were a lot more hesitant with respect to lending,” she said. “The risk factor certainly has gone up so I think there’s an element of caution but I wouldn’t say we’re in a bad state, that’s for sure. And I think we’re going to see some more growth soon.”