The construction sector has been a key source of economic growth in Alberta. However, while activity remains elevated, it is clearly in a cooling phase with housing starts and employment both down from their recent peaks. 

Several years of rapid population growth—and the subsequent demand for everything from housing and commercial space to recreation facilities and schools—helped heat things up in the construction sector. As population growth in the province has come back down to Earth, construction activity is now showing signs of cooling.

After averaging 1.7% over the 10 years prior to the pandemic, annual population growth in Alberta spiked to 3.9% in 2023 and 4.7% in 2024. Weighed down by the effort to reduce the number of non-permanent residents in Canada, population growth in Alberta slowed to 2.5% in 2025 with our March forecast pointing to growth of about 1.1% this year and 1.6% in 2027.

The impact of these demographic trends is evident in the rate at which new homes are being built. Home builders responded to the spike in population by ramping up housing starts by 33% in 2024 and then by another 15% in 2025 to reach an all-time high of just under 55,000 units.

As population growth has slowed, so too has the pace of new construction, with monthly housing starts on a downward trend since October of last year (based on the six-month moving average). We expect this cooling trend to continue, with annual starts down about 17% this year from the record set in 2025. While lower, annual housing starts in Alberta will still be well-above where they stood before the pandemic.

Residential building construction spending, meanwhile, peaked in 2024 while the non-residential component continued its upward trajectory in 2025 on the back of particularly strong growth in governmental and institutional building projects and ongoing growth in the construction of buildings for industrial use.   

The same pattern is evident in the number of Albertans employed in the construction sector. Total employment in the sector* grew by 2.8% in 2024 and then spiked by 5.2% to a record high of 260K last year.

Looking at the more recent trend, however, employment has been decreasing since the peaks reached over the first half of 2025. The job vacancy rate in the construction sector has eased, but it still remains higher than in most other industries. Despite this, employment in the first quarter of this year was higher than over the second half of 2025 and much stronger than the levels prior to the pandemic.

*This includes workers involved in both residential and non-residential projects, but data on employees from the Survey of Employment, Payrolls and Hours (which does not include self-employed workers) shows that the increase in construction employment in the last three years has been led by the residential sub-sector.  

Putting this all together, it’s clear that the Alberta economy has been benefitting from a construction boom driven by a spike in population. And, while both population growth and the construction boom have eased off, they remain a key source of growth for the province going forward.

With Alberta’s population projected to grow much faster than the rest of the country in the years ahead, the boost from construction, even if it is down from what we’ve seen recently, will remain relatively strong.

Less certain but presenting a large degree of upside, is the potential for major projects such as a new oil pipeline, carbon capture systems and data centres to come online and increase the demand for construction labour (which can also be a challenge due to limited supply). Our current forecast includes the lift from projects approved and underway (e.g. Dow’s Path2Zero project) but has not baked in major projects that are yet to reach a final investment decision.

Answer to the previous trivia question: It’s true: The food menu for the Artemis II astronauts included barbeque beef brisket.

Today’s trivia question: Which NHL team has secured first place for the 2025-26 season?