CALGARY, ALBERTA--(Marketwire - Jan 17, 2013) - Alberta''s economy continues to sit near the top of the Canadian growth leaderboard, according to the Provincial Monitor report released today by BMO Economics. Growth of 2.7 per cent is expected for 2013.
"The energy sector remains the critical driver of economic activity in the province, and crude bitumen production was up a solid 17 per cent year-over-year through October," said Robert Kavcic, Senior Economist, BMO Capital Markets. "However, there are some mounting risks in the sector. Cost pressures could again pick up, though oil sands operations are generally viewed as economical at prices above $80. A large risk is lack of progress on new pipeline capacity to carry Alberta crude to markets in Asia and/or the U.S. In the meantime, surging U.S. Bakken production has also contributed to a wider discount received by Canadian producers relative to WTI."
Labour market trends, while still favourable, have ebbed from strong performances in recent years. "Private-sector job growth cooled to 3.5 per cent in 2012 from 6.5 per cent in the prior year, with manufacturing and trade gearing down," noted Mr. Kavcic. "Public-sector job growth jumped 3.6 per cent, which might not be sustainable given a mounting budget challenge."
"Businesses in the private sector continue to support Alberta''s economic growth by making important strategic investments and expanding into new markets," said Mike Darling, District Vice President, Commercial, Southern Alberta, BMO Bank of Montreal. "Our BMO Confidence Report shows that Albertan entrepreneurs have a positive outlook, with 70 per cent saying 2013 will be a better year and the majority expecting their business will experience growth in the year ahead."
Housing market activity is improving thanks to rising demand and a gradual drawdown of the excess supply put up during the 2005-2007 boom. "In Calgary, the average home transaction price was up 8.6 per cent year-over-year in December as the market balance has again tilted in favour of sellers," said Mr. Kavcic.
The Province of Alberta reported weaker-than-expected financial results for the first half of fiscal 2012-2013. The deficit over the first 6 months of the fiscal year sat at $1.3 billion, larger than the $777 million expected over that period in the fiscal 2012-2013 budget, and the Province continues to point to a full-year shortfall in the $2.3 billion-to-$3 billion range.
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 $525 billion as at October 31, 2012, and more than 46,000 employees, BMO Financial Group provides a broad range of retail banking, wealth management and investment banking products and solutions.