Last week, we just received a preliminary indication of last year's economic performance. While the official GDP* figures won't be released until November, this latest data from Statistics Canada offers some initial perspective.

Alberta's real GDP by industry saw a 2.7% increase last year, which follows a 3% gain recorded in 2024.

Despite uncertainty and trade tensions in 2025, economic growth in both Canada and Alberta exceeded expectations from early last year. Much of this stems from the impact of U.S. tariffs coming in less than initially feared, thanks to CUSMA exemptions on most goods.

GDP outpaced population growth for the first time since 2022

Alberta's economy was a key driver of Canadian GDP growth (+1.6%) last year, with its contribution nearly matching that of Ontario. For the fourth consecutive year, Alberta's GDP growth in 2025 exceeded the national average. Last year’s growth ranked third fastest among provinces after PEI and Newfoundland & Labrador.

Another significant development is that Alberta's economic output caught up to its population** increase last year, a feat not achieved since 2022. This improvement was fueled by a strong economic performance and a substantial deceleration in population growth. Last year, Alberta's population increased by only 2.5%, a sharp decrease from the 4.7% seen in 2024. 

As a result, per capita GDP, which had been declining since 2022, managed to register a minor uptick (+0.2%). However, since Alberta led the country in population increases last year, it lagged most other provinces in GDP per capita gains.

Energy and agriculture lead economic gains

Drilling down into the performance of specific industries, almost all sectors reported output gains last year. The strongest contribution came from the mining, quarrying, oil and gas extraction sector, which expanded by 4.2%. This was anticipated as oil production hit record highs, boosted by the added capacity from the Trans Mountain Expansion and subsequent increase in shipments to Asian markets. Natural gas output also posted a strong gain supported by the Montney Formation.

The agriculture and forestry category was the second-largest contributor. This was driven by near-record yields for major crops—wheat, canola, and barley—propelling crop output up by 18.2%, the fastest pace since 2022. The construction sector also made advances, jumping 5.3% to reach its highest level in a decade, buoyed by demand for residential housing and engineering projects.

While goods-producing industries collectively added a 1.5 percentage point uplift to GDP growth, the services sector also provided a meaningful boost, largely driven by the finance, insurance, real estate, and rental services sector.

Manufacturing and educational services see declines

Only two (out of 19) major industries in Alberta experienced a decline in output: manufacturing and educational services.

Alberta's manufacturing output declined by 2.1%. Food manufacturing was hit particularly hard, with output falling 3.8%, partly due to tariffs imposed by China in March on Canadian canola alongside declines in meat processing. Wood manufacturing output dropped to its lowest level since 2019 amid ongoing pressure from U.S. tariffs and anti-dumping softwood lumber duties. Meanwhile gains in machinery and chemical manufacturing were largely counteracted by pullbacks in fabricated metals and refined petroleum products.

The educational services industry was the only other major sector to decline, with output falling 2.4%—a first since the pandemic as a result of the three-week strike by teachers in October.

As noted earlier, the trade war with the U.S. had a widespread negative effect on Canada's manufacturing sector, particularly in areas with greater exposure to U.S. tariffs like steel, aluminum, autos and lumber. Quebec’s manufacturing sector recorded the largest decline in five years at -4%.  

What can we expect for 2026?

Alberta's economy is expected to continue to outpace the national average this year. Our latest forecast calls for a 2.7% expansion versus 1.3% nationally. Despite the challenges posed by ongoing trade tensions with the U.S. and the impending CUSMA review, the province is bolstered by its status as Canada's largest oil producer and its relatively light effective tariff burden.

Furthermore, the continuing moderation in population growth is expected to contribute to further improvement in per capita GDP growth in 2026.

*Today’s Twenty-Four reports on GDP by industry, not GDP by expenditure, which typically doesn’t come until the fall. We “officially” use GDP by expenditure, but in the interim, GDP by industry growth is used as a proxy.  Bottom line, we won’t actually know for sure what the official GDP growth for Alberta will be in 2025 until November.

**As of July 1, 2025 (census year)

Answer to the previous trivia question: The West Texas Intermediate oil price benchmark reached an all-time high daily spot price of US$145 on July 14, 2008.

Today’s trivia question: Montreal is the last Canadian team left in this season’s NHL playoffs. When was the last time the Montreal Canadiens won the Stanley Cup?