The Alberta economy is now going through the strongest period of sustained economic growth ever seen in any Canadian province, according to a wide-ranging study from Statistics Canada.
[Alberta’s] nominal gross domestic product (GDP) rose 43% between 2002 and 2005, and there is no sign of slowing down so far in 2006. As a result of this unprecedented boom, Alberta has the highest share of its population employed and the lowest unemployment rate of any province or state in North America.
The 12.7% average annual growth of Alberta since 2002 compares favourably with China's 14.8%, the fastest rate among the world's large economies. But, while China's growth was mostly volume, Alberta's was mainly driven by higher export prices. Still, its 4% average increases in real GDP were the fastest in Canada after 2002.
Alberta's per capita GDP reached $66,275 in 2005, nearly double the average income in 1995 and 56% above the national average. This deviation from the national average is the largest ever posted by a Canadian province.
Other economic indicators are also rising through the roof. Business investment has grown 37% in the last three years with no sign it will slow down anytime soon. Consumer spending is expanding at a record-setting pace; if the 17% increase posted so far this year continues, retail sales will have risen by the greatest percentage ever observed in Canada.
Even though Alberta consumers are spending more than ever, the 5.1% personal savings rate is also the highest in Canada.
Despite having the highest rate of population growth in Canada every year since 1996, Alberta has the tightest labour market in the country. Shortages of both skilled and unskilled labour have sent average hourly earnings up to $20.94, the highest of all the provinces.
Over the last decade, Alberta has consistently had Canada's strongest labour market. When adjusted to a comparable basis with the United States (which excludes 15 year olds), Alberta's 2.9% unemployment rate in June was the lowest of any province or state in North America, while it had the highest employment rate at 71.7%.
The boom is driven mostly by the mining (including oil and gas) industry. Rising prices and booming exports contributed to a doubling of Alberta's corporate profits in the last three years. Employment in the industry has risen by one-third, generating large spin-off job gains all across the economy.
The Statistics Canada study also points out the many ways that Alberta’s economic growth has benefited other parts of the country. In addition to providing jobs for Canadians who have moved there, the value of the province’s imports from the rest of Canada has risen by over one-third since 1999.
Alberta’s exploding economy has at least one worrying downside, however. About 25% of rural Albertans, enticed by the high wages available in the paid labour market, drop out before completing high school.
Sources:
Cross, Philip, and Geoff Bowley, 2006. “The Alberta economic juggernaut: The boom on the rose”. Canadian Economic Observer, September 2006. Statistics Canada catalogue no. 11-010. http://www.statcan.ca/english/ads/11-010-XPB/pdf/sep06.pdf (accessed 14 September 2006).
Statistics Canada, 2006. "Study: The Alberta economic juggernaut." The Daily, 14 September. Statistics Canada catalogue no. 11-001-XIE.
http://www.statcan.ca/Daily/English/060914/d060914c.htm (accessed 14 September 2006).
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