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Alberta's economy remains among the strongest in the country, and with oil near $100, the province should post above-average growth this year, according to a provincial economics report released today by BMO Financial Group.

“Consumer activity in the province is robust, job growth is firm, and near-$100 oil is a boon for provincial coffers,” said Douglas Porter, Deputy Chief Economist, BMO Capital Markets. “We expect growth to decelerate this year from an expected 3.8 per cent, but remain well above the national average at 2.8 per cent.”

Highlights of the report include:

• Despite oil prices remaining near $100, a number of factors are contributing to slower growth in the province this year. The once white-hot housing market is cooling fast, a stalled inflow of provincial migrants, and an outright recession in drilling activity.
• But with oil near $100, a bust scenario is still a long-shot. Indeed, the pipeline of capital investment in the sector, despite announced and threatened cuts, has been estimated to be a hefty $237 billion.
• The demand for workers also remains firm, and the province should again outpace the nation in employment growth and retail sales this year. Indeed, the province still boasts the fastest rate of employment growth and the lowest unemployment rate in the country.
• Alberta continues to ratchet up its surplus estimates for Fiscal 2007/2008. Revenue is now estimated to be $37.5 billion, up 6.3 per cent from the budget estimate. Higher-than-expected oil prices and stronger tax revenue—both personal and corporate—are contributing to the upward revisions.

The complete report can be found at www.bmocm.com/economics.

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