Overview
Alberta’s economic growth is set to pick up this year, but will lag behind the exceptional increase in the province’s population. Expanding pipeline capacity and stronger-than-expected oil prices are boosting revenues and activity in the energy sector, while output from other sectors has been slow to gain momentum. Industrial investment is gaining traction and intentions have been strong. Residential construction investment is benefitting from exceptionally strong population growth, but that surge in population is also putting pressure on Alberta’s tight housing and rental markets. This had led to accelerating shelter costs, which are propping up headline inflation.
Alberta’s real gross domestic product (GDP) is now expected to rise 3.3% in 2024, up 0.4 percentage points from Budget 2024, but the exceptional pace of population growth means Alberta is falling behind in per-capita GDP. Consumer spending in the province remains anemic and continues to be the biggest drag on growth. Easing interest rates are expected to provide some relief in the second half of the year.
