There’s Alberta’s Economy and then there is the rest of Canada!

SPECIAL REPORT: There’s Alberta’s Economy and then there is the rest of Canada!

Based upon the almost daily and numerous news features, it is hard to not to see the sheer economic strength of Alberta, and how it is benefiting the entire country. Alberta leads in almost every category:

  • GDP,
  • Job growth,
  • Population growth,
  • In-migration,
  • Average income levels,
  • Disposable income.

There is more to Alberta’s economy than just oil. Even though Oil and Gas production is still Alberta’s largest single economic driver, Alberta’s Economy has become more diversified than we may think.

The following two pie charts demonstrate this diversification.


Not only is Alberta benefiting from its own success, the entire country  is economically benefiting from Alberta’s success.

GDP:

In reviewing the GDP of Alberta, it is amazing how significantly it stands out. Here are some quick stats:

    • Alberta’s economy expanded by 3.9% in 2013, the third highest provincial growth rate.
    • Alberta leads all provinces in economic growth during the past 20 years, with an average annual GDP growth of 3.5% per year.
  • Alberta’s per capita GDP of $77,489 is the highest of any state or province in North America


A recent Conference Board of Canada Report stated:

    • Economic growth in Alberta is expected to be the strongest in the country in 2014 and 2015. Real GDP will rise by 3.5 per cent in 2014 and by 3.1 per cent in 2015. Strong economic growth will continue to fuel gains in employment and income, further increasing the government’s tax base.
  • As a consequence, Alberta is one of the few provinces set to have balanced books in 2014-15, along with B.C. and Saskatchewan. In addition, Alberta is the only province with a net surplus of financial assets. This implies that interest payments on debt will be negligible over the forecast period-a feat that no other province will accomplish.

Job Growth:

Alberta is currently leading labour participation rates in Canada at 73.1%

Also in 2013 Alberta had one of the lowest unemployment rates of all provinces at 4.6%, 2nd only to Saskatchewan at4.0%.

Population Growth

Alberta’s population continues to grow
Alberta’s population is expected to expand by almost 2.2 million people by the end of the projection period, to over 6.2 million in 2041 from just over 4.0 million in 2013.

What is also important to note where in the province the population is expected to grow the most. Calgary, Red Deer, Edmonton corridor and Grande Prairie have the highest expected population growth. As a real estate investor this is important information.

In-migration – Alberta is leading the country in inter-provincial migration. Why? Jobs, lower cost of living relative to income, quality of life.

Average Income:

According to Statscan, the Prairies continue to be the hottest job market for Canadians – and this is reflected in their pay cheques as well. Saskatchewan and Alberta saw the biggest increases in salaries last year.

With a nearly 5% increase over the past 12 months, wages in Saskatchewan went up the most to just over $50,000 a year.

Meanwhile in Alberta, the average weekly earnings went up 3.7% to $1,131 or $58,800 a year. This growth in pay was seen across most sectors, and according to Statistics Canada, the average earnings in this province are at least 17% higher than those of any other region in the country.

Housing

 CREA 2015 Forecast: Alberta Price & Sales Growth To Lead Nation

According to Pierre Leduc of CREA in 2015, national activity is forecast to edge up a further 1.2 per cent to 469,400 units. Affordability is expected to restrain activity in Canada’s most expensive markets, with annual sales forecast to decline marginally in British Columbia, and hold just below 200,000 units in Ontario for the fourth consecutive year.Alberta is the notable exception, where it is anticipated that strong economic and job growth combined with supportive demographic trends will result in strengthening annual sales activity.

According to the latest CMHC rental market report, the national two-bedroom average rent in new and existing structures was $930 in April 2014. Provincially, the highest average monthly rent was in Alberta ($1,190), while the lowest was in Quebec ($709).

Also, the average rental apartment availability rate in Canada’s 35 major centres was 5.0 per cent in April 2014, relatively stable from the 4.9 per cent reported in April 2013.   Provincially, the highest availability rate was in New Brunswick (10.0 per cent), while the lowest vacancy rate was in Alberta (2.6 per cent).

So why are all these stats so important. As a real estate investor, real estate is a function of the economy and the chart below from REIN demonstrates the importance of these stats.

As a real estate investor, I like to go where the sustained economic growth, jobs,  and ultimate the money goes and I recommend the same to my clients.

By Andrew Schulhof
29 Aug 2014