Glancing in the rearview mirror is not the best way to know what’s up ahead with regard to Alberta’s labour market, but it’s still helpful, especially when the windshield is foggy due to the ongoing effects of elevated inflation and high interest rates.

Fortunately, Alberta’s labour market went into 2023 on a strong footing.

Strong job growth

• Average annual employment in Alberta in 2022 grew by 5.1% compared to 2021
• That’s an average of 114,200 more jobs and the second highest percentage increase of any province (Prince Edward Island added 5,200 jobs for a percentage increase of 6.5%) 
• About 100,000 (87%) of the increase in Alberta was in full-time work
• At 3.7%, employment growth in the country as a whole was solid, but more modest than in Alberta

The unemployment rate fell

• The unemployment rate in Alberta averaged 5.8% in 2022
• That’s better than 2021 when it averaged 8.7% and much better than 2020 when it averaged 11.4%
• Tthe annual unemployment rate hasn’t been lower since 2014 when it averaged just 4.7%

Despite this, our unemployment rate was a bit higher than the national average

• The national unemployment rate averaged 5.3% last year compared to 5.8% in Alberta
• Quebec had the lowest annual unemployment rate at 4.3%; Newfoundland and Labrador had the highest at 10.8%
• The higher unemployment rate in Alberta was not due to a weaker economy—our relatively strong economy pulled a larger proportion of people into the provincial labour force and explains why our unemployment rate was higher even though we had stronger job growth
• Alberta’s labour force grew by 1.8% compared to 1.3% nationally and we continued to have the highest participation rate of any province

What’s next?

• Continued economic growth in the province combined with the labour market momentum built up last year will support job growth in Alberta in 2023
• With that said, we are expecting annual employment growth to slow to around 1.8% as interest rate increases work their way through the economy
• At the same time, labour shortages will remain a key problem

Answer to the previous trivia question: The Bank of Canada’s key policy interest rate is currently set at 4.25%. The last time it was this high was in December 2007.

Today’s trivia question: What was the average annual unemployment rate in Alberta in 2006 during the natural gas boom?