The seatbelt sign is on
But Alberta’s economy is still moving forward
By Rob Roach, ATB Economics 19 May 2022 2 min read
From inflation to the higher interest rates aimed at controlling it to the war in Ukraine and the ongoing pandemic, there is no shortage of economic headwinds blowing against economies around the world, including ours here in Alberta.
At the same time, the economic momentum that began building in the province last year combined with the benefits we receive from high commodity prices will help Alberta power through the headwinds and post strong economic growth in 2022 and 2023.
This is the theme of ATB’s quarterly forecast for the Alberta economy that was released today.
Keeping in mind the high degree of uncertainty that continues to prevail in the wake of the pandemic and the ongoing war in Ukraine, we expect Alberta’s economy to grow by 5.0% this year followed by 3.5% in 2023.
Boosted by high oil and natural gas prices, Alberta will likely lead the country in economic growth this year. Despite this, when we take population growth and the hole left by the pandemic and the oil price crash of 2020 into account, Alberta’s per capita GDP will not catch-up to its pre-pandemic level until 2023.
The positive effects of higher prices for agricultural products will be offset by higher prices for fuel, fertilizer, feed and labour. Individual circumstances may enable some producers to reap the benefits of the price spikes, but the overall impact of higher inflation and drought on operating costs will weigh heavily on the margins of many farmers and ranchers.
Capital investment in Alberta is getting a boost from the oil and gas, technology, petrochemical, warehousing and distribution, and renewable energy sectors, with other industries benefiting from the ripple effects.
Alberta’s labour market has come a long way from the 15.3% unemployment rate seen in the summer of 2020. As of April, seasonally adjusted employment stood 2.8% above the pre-pandemic level set in February 2020 with more job growth expected as we get deeper into the year.
Looking at things from 30,000 feet, Alberta has a strong economy and will continue to move forward despite the heavy turbulence working against growth both here and around the world.
Answer to the previous trivia question: Prior to the current series, the Flames and Oilers played against one another five times in the playoffs (1983, 1984, 1986, 1988 and 1991).
Today’s trivia question: When did the Edmonton Oilers join the NHL?