With fears that there’s a recession on the horizon, Alberta is well positioned in an economic sense to withstand any turbulent times that may lie ahead.
Oil prices are up, the provincial government has a substantial surplus, immigration and net migration are bringing more people to the province, and more jobs are being created.
Many experts are saying that the US might go into a recession in the latter part of this year or early next year with Canada perhaps following that economic path.
Historically, Alberta has weathered those storms.
In fact, ATB Financial’s latest quarterly Economic Outlook Report forecasts Alberta’s economy to remain strong while pushing through global headwinds and continuing to build momentum this year.
The report is predicting the province’s real Gross Domestic Product will grow by a very healthy five per cent in 2022 followed by 3.5 per cent growth in 2023. This comes after Alberta experienced 5.1 per cent growth in 2021 following the record 7.9 per cent contraction in 2020.
“Alberta’s economy is experiencing the same global headwinds as everywhere else,” says Rob Roach, ATB’s Deputy Chief Economist. “But, as a major producer of oil, we are benefiting from sky-high prices which are helping to boost our economy.”
The ATB report, though, says Alberta’s per capita GDP will not catch up to its pre-pandemic level until 2023 when you take into account population growth, the hole left by the pandemic and the oil price crash of 2020.
Despite the international headwinds created by a war in Ukraine, the lingering COVID uncertainty and inflation, ATB says Alberta, being a major oil, natural gas and agricultural producer, receives a boost from higher commodity prices that helps offset those headwinds.
“Alberta remains one of the best economies in the world and—barring the geopolitical situation getting even worse—should be able to push through the global headwinds and post strong growth in 2022,” says the ATB report.
The TD Economics Provincial Economic Forecast, released in June, also paints a good picture for Alberta, similar to what ATB is predicting.
“Alberta is likely to lead the way in terms of economic growth this year, as the steep climb in crude oil, natural gas and agricultural prices lift incomes in the province,” it says.
All those economic reports bode well for the province’s real estate industry – from homebuilding, to home sales to the rental market.
A strong economy creates jobs, it entices people to move here from other provinces and from other parts of the world, there’s more disposable income to fuel all sectors of the economy and of course with more people it means a higher demand for housing.
In many ways, Alberta right now, from an economic point of view, is the place to be in Canada.
Chris Chornohos has a passion for real estate and helping his clients reach their business goals by providing Real Estate Investors and Owners with the first class valuation and advisory services to close more deals. Chris is also an investor, builder and developer. Reach out to Chris today to help with your Real Estate needs.