Alberta booming again as it’s forecast to lead country in economic growth

Alberta will be the country’s leader in economic and employment growth in the next two years, says a report released Tuesday by RBC Economics.
The report said Alberta will see real GDP growth of 4.0 per cent this year followed by 3.9 per cent next year while employment growth will be 2.8 per cent this year and 2.6 per cent in 2013.
The province will top all provinces in both categories in each of the two years with the exception of GDP growth in 2013 which will tie it for the best in the country with Saskatchewan.
Nationally, RBC is forecasting economic growth of 2.6 per cent for the country in each of the next two years with employment growth at 1.1 per cent in 2012 and 1.6 per cent in 2013.
“The Alberta economy is off to a very strong start to 2012. It is leading all other provinces on the majority of performance indicators so far this year and by a wide margin in several instances,” said the RBC Economic Outlook. “Such vigour confirms that the impressive pickup in economic activity last year — when real GDP growth exceeded five per cent for the first time since 2006 — was no fluke.”
“Mega” capital spending in its energy sector continues to be a catalyst for activity across all industrial sectors in the province, said RBC.
“We believe that the solid momentum in the Alberta economy to date will be maintained during the remainder of this year,” added the report. “Massive investment in the energy sector — slated to reach new heights in 2012 — will continue to prime activity throughout the provincial economy. Add in another banner year for Alberta’s oil production, notwithstanding temporary disruptions in the spring, and a turnaround in the housing sector, and then we have the elements for strong economic growth. Alberta is booming again.”
Just last week, Calgary Chamber of Commerce’s chief economist, Ben Brunnen, predicted that Calgary and Alberta are poised for the strongest period of economic growth in the past five years.
He said Alberta will lead the country in economic growth this year with real GDP growth between five and 5.2 per cent and Calgary’s forecast growth is 3.8 per cent.
Nationally, the RBC report said Canada’s economic growth was somewhat subdued in the first quarter of 2012 but is expected to gain ground going forward.
“We expect that gains in consumer spending will be complemented by stronger business investment flows. Exports should also pick up as U.S. demand recovers,” said Craig Wright, senior vice-president and chief economist with RBC. “On balance, conditions for growth are positive, supported by a continuation of a low interest rate environment and a Canadian financial sector that is healthy and ready to provide credit.”
The Outlook said Canadian businesses are in an enviable position – holding high cash balances and having access to financing at low interest rates. Recent surveys indicate that Canadian businesses intend to invest in capital goods and non-residential construction, which RBC said will account for about one-third of GDP growth in both 2012 and 2013.