A research note released yesterday from Scotia Economics details how Alberta`s economy & housing market contrasts the rest of the country.
Of all the provinces, Alberta has the highest real GDP growth rate forecast with 3.4% growth expected in 2012 and 3% in 2013.
The economy is growing strongly with contributions from various fronts with consumer spending a key component. Retail sales have increased by 9% this year as of August.
Increased spending has been supported by year-over-year weekly wage gains of 3% and a province leading employment YTD growth rate of 2.9% as of October.
With the highest employment growth and average weekly wages that exceed
the national average by nearly 20%, it`s no wonder Alberta has been the move-to province, attracting workers from across the country and world. In Q2 2012, Alberta had a year-over-year population growth rate of 2.5%, once again the highest in the country.
In contrast with the rest of the country (a phrase that we are becoming accustomed to reading lately) which experienced year-to-date growth of only 1% in home sales through October — Alberta’s housing market has been robust with home sales increasing by nearly 14% over that period. Scotia wrties:
In particular, home sales are strong in Calgary — up 19% year-to-date — while sales advanced by 5% in Edmonton. As of October, average house prices in Alberta have increased a mere 2% year-to-date, as supply has responded to strengthening demand. Urban housing starts are up a sizeable 33%, as housing starts have recovered from the steep declines of the 2008-2009 recession.
At this juncture, the federal government’s recent tightening of mortgage and home equity financing standards appears to have had a limited impact on Alberta’s housing market. It continues to be
supported by strong employment growth, significant wage gains and ongoing resource development
Other report highlights include:
- Commercial construction is strong, increasing 17% year-to-date
- Natural gas output negatively affected by low prices
- Crown petroleum and natural gas land sales are down 69% as of October
- Oil and gas drilling activity has declined by 8% as of September
- Unlike natural gas production, the petroleum sector remains strong. Year-to-date growth of oil production has been impressive, up 16% as of August
Some things to keep our eye on:
- A disproportionately large share — 86% as of 2011 — of Alberta’s total exports and virtually all of its oil and gas exports are directed to the US
- In 2011, oil and gas exports represented 68% of total exports
- Alberta’s exports grew in 2012, supported by the economic recovery in the US
- China is the province’s second largest recipient of exports, but its rapid economic expansion has been slowing of late