CALGARY, ALBERTA--(Marketwire - May 3, 2012) - Alberta's economy significantly outperformed the national average in 2011, as rising oil production fuelled 5.2 per cent real GDP growth, according to the Provincial Monitor report released today by BMO Economics. The province should remain atop the Canadian leaderboard this year, with growth running 1.5 percentage points above the national average at 3.4 per cent.
"The energy sector continues to drive growth in the province, with oil production up 9.8 per cent in 2011 despite some temporary disruptions," said Robert Kavcic, Economist, BMO Capital Markets. "Crude bitumen production rose 12 per cent, and the Province is expecting growth of more than 10 per cent annualized in the next three years."
Strength in the energy sector has rekindled in-migration and helped tighten the labour market. "Net interprovincial in-migration was the highest since early 2008 in the first three quarters of 2011," noted Mr. Kavcic. "As well, private-sector employment growth was a robust 6.9 per cent year over year in the first quarter of 2012, well above the 1.5 per cent year over year national pace. Concerns over labour availability and input costs are now increasing, but most recent metrics remain far from the extremes of the last boom."
"With the private sector driving Alberta's impressive employment growth, Albertans are demonstrating their confidence in the economy," said Bill Hogg, District Vice-President, Commercial, Alberta, BMO Bank of Montreal. "It's no surprise that we're seeing entrepreneurs continue to make strategic investments to grow their businesses and open up new markets."
Housing market activity remains well behaved given lingering supply from the pre-recession building boom. Average prices are relatively stable, but sales are moving higher (up 12.8 per cent year-over-year) and could soon spur renewed upward pressure on prices-the months' supply is falling quickly, hitting a 2-year low in March.
The Province of Alberta is projecting an $886 million deficit for fiscal 2012-2013, an improvement from the $1.3 billion shortfall estimated for fiscal 2011-2012. "At nearly 30 per cent of total provincial revenues, resources are clearly the main source of risk to Alberta's revenue outlook," said Mr. Kavcic. "For example, a $10 drop in West Texas Intermediate crude oil prices would cut revenues by an estimated $2.2 billion."
The full Provincial Monitor can be downloaded at www.bmocm.com/economics.
About BMO Financial Group
Established in 1817 as Bank of Montreal, BMO Financial Group is a highly-diversified North American financial services organization. With total assets of $538 billion as at January 31, 2012, and more than 47,000 employees, BMO Financial Group provides a broad range of retail banking, wealth management and investment banking products and solutions.