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Alberta’s economy still playing catch-up

Alberta’s economy still playing catch-up

Posted on: 5/3/2019 | Author: ATB Financial's Economics + Research Team

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Consistent with ATB Financial’s economic forecast, Statistics Canada reported earlier this week that Alberta’s real GDP grew by a respectable 2.3 per cent in 2018. Despite the growth, we haven’t caught up to where we were before the recession of 2015-16.

Alberta’s real GDP in 2018 was still 0.9 per cent ($3.2 billion) below where it was in 2014. That might not sound too bad, but when we take into account the population growth since 2014, our economic output in 2018 was 6.1 per cent behind where it was before the recession took hold. Real GDP per Albertan in 2014 was $82,833 compared to $77,801 in 2018.

The oil and gas extraction sector’s real GDP increased by 26.2 per cent between 2014 and 2018, largely due to higher production levels in the oil sands. (Real GDP keeps the price of oil constant so the decline in the nominal value of oil output during the downturn is not reflected here.)

Sectors that are dependent on oil and gas extraction have not fared as well. The GDP of support activities for oil and gas extraction was down 27.4 per cent in 2018 compared to 2014. That of professional, scientific and technical services was down 20.2 per cent and construction’s was down 31.7 per cent.

Sectors that posted gains include agriculture, with its GDP up by 6.7 per cent in 2018 compared to 2014, transportation and warehousing (+11.3 per cent), finance and insurance (+13.4 per cent) and arts, entertainment and recreation (+20.2 per cent).

With Alberta’s GDP growth in 2019 shaping up to be lower than it was last year, catching up to pre-recession levels in all areas of the economy is going to be an uphill climb.

 

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