TORONTO, March 19, 2013 /CNW/ - Despite facing challenges, Alberta's
economy will continue its impressive boom through 2013 after leading
the country's economic growth in 2012, according to the latest RBC Economics Provincial Outlook released today. RBC forecasts a provincial real GDP growth rate of
three per cent thanks to strong crude oil production as well as high
levels of capital investment, employment and population growth.
"Even though the province recently announced a $2 billion budget
deficit, Alberta is unquestionably in the midst of an impressive
economic boom - particularly with capital investment fuelling
manufacturing and wholesalers' sales. Attractive employment
opportunities are also bringing new migrants to the province, boosting
population growth and in turn, consumer spending," said Craig Wright,
senior vice-president and chief economist, RBC. "As the economy
continues to thrive across the majority of key industries, Alberta will
remain at the top-end of Canada's economic growth rankings this year."
The RBC report notes, however, that there are a couple of weak spots in
Alberta's economic outlook. Statistics Canada's latest Public and
Private Investment survey showed some signs that non-residential
construction - a major catalyst of economic activity in the province -
Investment intentions in the oil and gas sector are essentially flat for
2013. RBC says that Alberta's energy developers' plans are being
weighed down by rapidly rising energy production in the U.S., pipeline
bottlenecks and the 'bitumen bubble', all of which contributed to lower
crude oil prices in Canada relative to global benchmarks late in 2012.
"Weaker than expected oil prices put a multi-billion dollar hole in
Alberta government's revenues, and led to a 2013 provincial budget that
detailed renewed public sector spending restraint," explained Wright.
"Still, any pullback in capital spending will be short-lived as
pipeline issues are addressed and crude oil price relationships
The upcoming decision on the fate of the northern section of the
Keystone XL pipeline project will provide significant insight on future
investment prospects in the oil sands. RBC Capital Markets' Global
Research equity analysts ascribe a 75 per cent probability on the
project being approved.
Overall, any dark clouds that are currently hanging over the province
will clear by 2014, paving the way for strong business and consumer
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
Robert Hogue, RBC Economics Research, 416 974-6192
Elyse Lalonde, Corporate Communications, RBC Capital Markets, 416 842-5635