CALGARY – Most signals on Alberta’s economy dashboard are delivering the same message into 2013: “Things are good,” says TD Economics.
And there’s little surprise why Alberta’s economy outperformed the rest of Canada this year, with key economic indicators such as labour markets, investment indicators and consumer demand expected to remain strong.
Following a projected 3.4 -per-cent gain this year, real GDP is forecast to advance a further 3.0 per cent in 2013 and 3.3 per cent in 2014, just behind Saskatchewan’s pace, according to the Conference Board of Canada.
“For the first half of 2012, we were moving gangbusters. All the indicators were strong … right up until June,” says Ben Brunnen, chief economist with the Calgary Chamber of Commerce.
The start of summer saw oil prices fall and economic turmoil in Greece and other pockets of Europe spin off into the general economy.
“We are by far in a better position than anywhere else in North America. And our net migration numbers are showing that,” said Brunnen. “People continue to be moving here. I think that trend is going to continue.”
There remain some challenges which may yet affect Alberta’s forecast economic growth. These include the province’s continuing skilled labour shortage and the ongoing economic challenges in Europe and the United States.
Todd Hirsch, senior economist with ATB Financial, still sees Alberta as one of the country’s economic growth leaders with “nice moderate” growth of three to 3.5 per cent next year.
“We’re seeing a little bit of softness on those energy prices, just enough to kind of temper things a little bit,” he said. “The energy companies would like to see those energy prices a little bit stronger but on the other side we’re seeing very, very good results in agriculture, in construction and the retail trade.”
Wages are rising and interprovincial migration should remain steady into next year, said Hirsch.
“Even though there’s a little bit of softness on the oil side, the other sectors of the economy are actually doing quite well,” he said.
Doug Porter, deputy chief economist with BMO Capital Markets, says one of the dominant stories, in not just the last couple of years but the past decade, has been the performance of the Alberta and Saskatchewan economies against the rest of the country.
“And I think that will continue in 2013 and even 2014,” he said.
“But having said that, the gap with the rest of the country is narrowing.
“I still think Alberta is one of the strongest growing economies but its lead won’t be as dominant and of course one of the stories there is just simply the softening we’ve seen in oil prices relatively recently. We see a bit firmer prices next year, but not much different from where we are today.”
Warren Jestin, senior vice-president and chief economist for Scotiabank, says the near-term outlook for the province is good.
“Even with some downsizing of big projects, the big issue is more supply constraint with labour than an absence of projects that will be moving forward,” he says.
“Growth that we have in our forecast next year of just a little under three per cent doesn’t sound that hot by historical standards but it’s nearly double what you’re seeing for all Canada.
“The near term looks relatively good and certainly if you’re in Alberta you’re feeling a whole lot more cheerful than if you’re in Greece, Spain, Portugal, Italy and wide variety of other countries around the world.”
Comments