News Releases

CALGARY, ALBERTA--(Marketwired - July 10, 2014) - As record numbers flock to the Calgary Stampede, a special report released today by BMO Economics forecasts that economic growth in Alberta will remain head and shoulders above the rest of the country.

"Growth in Alberta's population, employment and retail sales, among other indicators, are running head-and-shoulders above the rest of the pack," said Robert Kavcic, Senior Economist, BMO Capital Markets. "Indeed, the province remains on pace to see 3.5 per cent real GDP growth this year. Inflation is also moving higher in the province, with consumer prices excluding food & energy up 2.5 per cent year over year in May, just off a 6-year high."

Robert Hayes, Senior Vice President, Alberta & NWT, BMO Bank of Montreal, notes that commercial clients are clearly optimistic about business dynamism in Calgary and Alberta as a whole.

"Oil and gas companies and agricultural firms dominate the scene, but we see significant opportunity for firms that support the industry spinoffs. This particularly applies to the engineering sector, where our clients are experiencing considerable growth," added Mr. Hayes. Strong tourism, including record-setting attendance at this year's Calgary Stampede, also point at a healthy economy.

Alberta's economy is hot and inflation is warming up, but it's not yet at the point where massive upward wage and price pressure in the province will debilitate the economy, according to Mr. Kavcic. "In many areas, such as housing, commercial real estate and the labour market, the supply side has had much more time to respond to strong demand than during the overnight boom experienced through 2007 - and that might be a good thing. Still, businesses and policymakers will have to remain mindful that the province is effectively now on an island with respect to economic growth and potential inflation compared to the rest of the country."

Labour and Housing Market On Solid Ground

With respect to the labour market, Alberta's jobless rate sits at 4.6 per cent - the second lowest in Canada and down from 7.5 per cent at its post-recession high. "Interestingly, the jobless rate has held steady over the past two years, even as growth has remained strong, and wage growth is relatively tame at 1.9 per cent year over year," noted Mr. Kavcic. "Since the prior boom, 350,000 migrants have helped relieve the strain on the labour market, and strong labour force growth is keeping the jobless rate from sinking and wages spiralling higher."

On the housing side, a sudden population surge had homebuilders behind the curve last decade, which propelled rents and prices skyward. "There's little doubt that both are accelerating again, particularly in Calgary where the MLS Home Price Index has surged more than 10 per cent in the past year," said Mr. Kavcic. "Calgary's market clearly remains the strongest among major Canadian cities, even as Toronto is putting forth its best effort, and recent economic and demographic trends should support continued gains."

About BMO Financial Group

Established in 1817 as Bank of Montreal, BMO Financial Group is a highly diversified financial services organization based in North America. The bank offers a broad range of retail banking, wealth management and investment banking products and services to more than 12 million customers. BMO Financial Group had total assets of $582 billion and more than 45,500 employees at April 30, 2014.