TORONTO, March 20, 2012 /CNW/ - Alberta's economy launched into a
remarkable expansion phase last year, with real GDP reaching an
estimated 4.2 per cent, flashing unmistakable signs that the provincial
economy is booming once again, according to the latest RBC Economics Provincial Outlook report released today. Going forward, RBC expects this momentum to
continue and forecasts real GDP growth of 3.9 per cent in both 2012 and
"Alberta's economy is firing on all cylinders, with real GDP growth in
2011 climbing above the four per cent mark, the highest it's been since
2006. We anticipate that this pace will be largely sustained over the
next few years," said Craig Wright, senior vice-president and chief
economist, RBC. "Record levels of production and investment by
Alberta's oil industry are catalysts for the strong economic activity
and every sign is pointing toward another banner year for this industry
The RBC report also notes that rapid production in unconventional oil is
being boosted by massive investments in the oil sands. Unconventional
output is forecast to surge by 16 per cent this year, according to the
National Energy Board. Conventional oil production is also seeing an
uptick, rising in 2011 for the first time since 2003, with further
increases anticipated this year. Such vibrancy on the oil side of the
provincial energy sector will offset further expected declines in
natural gas output, as prices for this commodity remain weak.
In all, 99,000 new jobs were created in Alberta in 2011, representing
more than half the gains in Canada. Even more remarkable was that these
jobs were widely distributed across industries and were entirely
full-time positions. RBC expects strong job creation to continue in
2012 - albeit at a slightly slower pace than in 2011 - with employment
growth remaining at a nation-leading rate of 3.1 per cent this year,
down from 3.8 per cent last year. Labour market strength will continue
to boost consumer spending in the province.
"The Alberta government's bottom line is benefiting from the standout
performance in the oil industry and renewed interest in exploration,"
said Wright. "Strong revenues are expected in the coming years, thanks
in large part to an expected surge in royalties. This will bring the
budget to balance by 2013-14, eliminating the need for the province to
rein in expenditures as part of its fiscal plan."
Energy sector investments are also slated to reach new highs in 2012.
According to Statistics Canada's most recent report on investment
intentions, oil and gas firms plan to spend a record $48 billion this
year on capital outlays - an increase of 16.2 per cent from 2011.
Stronger spending on pipeline infrastructure will add to this total.
"Such colossal investment will continue to be a tremendous engine of
economic activity in the province," added Wright.
The RBC Economics Provincial Outlook assesses the provinces according to
economic growth, employment growth, unemployment rates, retail sales,
housing starts and consumer price indices. The full report and
provincial details are available online as of 8 a.m. ET today at: rbc.com/economics/market/pdf/provfcst.pdf.
For further information:
Craig Wright, RBC Economics Research, (416) 974-7457
Paul Ferley, RBC Economics Research, (416) 974-7231
Elyse Lalonde, RBC Corporate Communications, (416) 842-5635