TORONTO, Sept. 10, 2012 /CNW/ - Alberta's economic growth will remain in
pole position ahead of all other provinces in 2012, according to the
latest RBC Economics Provincial Outlook. RBC expects that province's economy will grow by 3.8 per cent in 2012,
the fastest rate in Canada and well above the national average of 2.1
"Alberta started 2012 on a high note with strong gains across the
majority of sectors, including continued massive capital investment in
the provincial energy sector," said Craig Wright, senior vice-president
and chief economist, RBC. "Employment, retail sales, home resales and
housing starts are all up, while the jobless rate is trending down.
Alberta's current economic boom is built on a solid foundation and we
expect the rapid growth trend to continue in 2013 at a pace of 3.6 per
The RBC report indicates provincial employment rose on strong hiring by
oil and gas extraction, construction and public sectors. The jobless
rate continues to decrease and now sits at 4.4 per cent - the lowest
among the provinces in August.
Positive employment numbers have translated into strong retail sales,
which were up 9.5 per cent in the first half of 2012 relative to the
same period in 2011. Consumers also indulged in big-ticket items this
year, increasing their purchases of new motor vehicles by a solid 13
The province's housing market was also spurred by confident consumers.
Home resales picked up by nearly 17 per cent in the first seven months
of the year, while housing starts surged by an impressive 46 per cent -
though levels remain substantially lower than those at the height of
the 2005-2007 housing boom in the province.
In the energy sector, activity remains brisk with mega oil sands
projects fuelling unprecedented capital investment spending in the
province. RBC notes, however, that recent volatility in global energy
markets has given way to increased caution in the industry. At this
point, RBC does not expect any significant change in conditions that
would dent spending in this sector this year.
"Previous investments in Alberta's oil production sector are now bearing
fruit. Crude oil production grew by more than 10 per cent year over
year in the first four months of 2012. If this momentum is sustained,
Alberta will register the fastest rate of increase in oil production
since 2003," added Wright. "Meanwhile, weakness in natural gas
production has abated somewhat - with production in the province
declining, at its slowest rate in six years at -1.8 per cent."
RBC notes that capital spending in the energy sector will remain a key
positive factor in the provincial economy, despite heightened
uncertainty around some of the oil sands investment projects. On
another positive note, people are settling in Alberta in increasing
numbers again. Strengthening demographics will also work to sustain the
province's boom in 2013.
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 7 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