Over the past six months, more than one-third of the new jobs created in Canada have been in Alberta, which is home to just over 10% of the country’s population. This clearly indicates the Wild Rose province is starting to bloom once more following an extended economic winter. Across major industries, manufacturing has, by far accounted for most (+41.7%) of the new jobs added followed by health services (+25.5%), professional and business services (+18%), natural resources (+10.9%) and agriculture (+8.2%). Reflecting this strong pattern of employment growth, Alberta’s unemployment rate fell to 5.7% in February, the second lowest in the country and well under the national average of 7.8%.
Driven by this solid pattern of employment growth, a concomitant rise in consumer confidence and low interest rates, consumer spending as reflected by retail sales in Alberta was 3.8% higher in Q4/2010 than during the previous quarter. This was the strongest quarterly gain in spending since Q1/2007 and significantly faster than the country as a whole (+2.5%).
The fact that residential building permits in January were 27% lower year over year, and existing house prices were essentially unchanged, suggests that the effect of stronger job growth and low interest rates will probably cause housing demand to gain momentum in the second half of the year and lead to a material strengthening of residential construction in 2012.
Looking ahead, Alberta’s growth prospects appear positive for two key reasons. First, the demand for oil should continue to strengthen, driven by the sustained expansion of US and global economic activity. Second, despite sharp year-over-year declines in planned spending on public sector education and public administration, capital spending in the province is projected to increase by 4.3% in 2011. This will be due primarily to very strong gains in the private sector including oil and gas exploration and processing (+17.6%), utilities (+10.6%), manufacturing (+25%) and wholesale trade (+21.4%).
This combination of stronger domestic and external demand should cause growth in Alberta to accelerate from an estimated 3.4% in 2010 to 4.5% in 2011 and to be in the range of 3.0% to 4.0% in 2012.
John Clinkard has over 30 years’ experience as an economist in international, national and regional research and analysis with leading financial institutions and media outlets in Canada.
By: JOHN CLINKARD, CanaData Read full article http://www.joconl.com/article/id44558