Transcript Document

7/21/2015
PROVINCE OF ALBERTA
ECONOMIC OUTLOOK
2008
PACIFIC NORTHWEST
ECONOMIC
CONFERENCE
1
THE BOOM IS OFF THE
ALBERTA ROSE!
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Boom Boom Boom Boom By the Animals
Everything is Beautiful By Ray Stevens
Hurts so Good By John Mellancamp
Flirtin’ with Disaster By Molly Hatchet
I’m Still Standing By Elton John
Truckin’..What a long strange trip its been by the Dead
I Can See Clearly Now By Johnny Nash
On a Clear Day, You Can’t See Forever
Don’t Cry for Me Alberta
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WHAT HAS HAPPENED
SINCE LAST YEAR
The Alberta economy grew by an estimated
6.6% in 2006
2007 saw robust growth in the first half
followed by slower growth in the second
Final estimates are not yet available, but the
consensus is that growth was in the 3 and ½ to 4
percent range.
Alberta’s nominal Gross Domestic Product
(GDP) rose in 2006 to an estimated $242
billion, or 17.0% of national GDP. Alberta has
10.4% of Canada’s population.
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Going 90 miles an Hour Down a Dead End
Street by Hank Snow
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More about last year
 In 2006, net in-migration was 57,000.
 In 2007, in-migration continued at relatively high
levels, but out migration exploded.
 Alberta had a net loss in the past quarter.
 The first time in 14 years!
 Movement was predominantly to British
Columbia and Saskatchewan, but in the last
quarter, there was net out-migration to seven
provinces.
 You say hello and I say good bye By the Beatles
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Still more about 2007
 The unemployment rate for 2007 was
3.5%, the second lowest in 30 year
history
 Participation Rate is now 74.5%...the
highest ever recorded in Canada.
 Alberta’s employment levels grew by
88,700 in 2007, a 4.7% increase.
 Everybody’s Workin for the Weekend
by Loverboy
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2007 and Inflation
 The tight labour market placed pressure on wages and
salaries, which increased by 11.5% in 2007. Hourly wages
increased by 6.2% between February of 2007 and 2008,
more than double the national increase.
 Alberta’s CPI inflation averaged 4.9% in 2007, up from
4.7% in 2006 and nearly double the national increase.
Up By Shania Twain or
Money for Nothing by Dire Straits
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Housing in 2007
 Slowing economic and population growth
resulted in housing starts settling to 38,478,
a little over 5% lower than last year.
 You can’t always get what you want, but
sometimes you can get what you need-The
Rolling Stones
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Manufacturing in 2007
 Manufacturing has been virtually flat since
late 2005
 Alberta has the fastest growing
manufacturing sector in Canada over the
past five years…little to brag about!
 Hanging Tough by the NKOB or
 Nothing from nothing Bill Preston
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2007 Investment
 Capital investment was over $80 billion
dollars in 2007.
 It is expected to grow by 3.8% in 2008.
 The growth will be driven by energy
investments, particularly in the oil sands.
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Exports in 2007
 Exports in 2007 rose to $80.855 from
$77.740 billion.
 This represents a 4 percent increase.
 Early indications suggest that exports will
continue to rise in 2008 despite the strong
Canadian dollar.
 It will be energy driven
 Grease by Frankie Valli
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The Future-GDP
 After the boom in 2007,
growth will “settle” with
growth in the 3.0 to 3.5%.
 This will still be one of the
top two or three growth
rates in Canada.
 The Conference Board
sees Alberta leading
growth in Canada as far in
the future as they look.
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3.5
3-D
Column
1
3
2.5
2
1.5
1
0.5
0
2007
2009
2011
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The Future-Employment
 Continued rapid
growth in
employment.
 Growth will be in the
2.0% range
 Accelerating
employment is
expected to being
again in 2010
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2100
2050
3-D
Column
1
2000
1950
1900
1850
1800
1750
2006
2008
2010
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The Future-Unemployment
 Well, it is what the model
says, but
 Our most recent
unemployment rate is still
3.4 and the drift is
sideways or down…not up
 The increase can happen
only with big in-migration
 Do You Believe in Magic
by the Lovin’ Spoonful
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4.2
4.1
3-D
Column
1
3-D
Column
2
4
3.9
3.8
3.7
3.6
3.5
3.4
3.3
2006
2008
2010
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The Future-Housing Starts
 This is probably closer to
reality
 Rapidly increasing prices
will force more into
rentals
 It may be one of the few
things to go down in
Alberta
 And the Walls come
Tumbling Down by John
Cougar Mellamcamp
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50,000
45,000
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
2006 2008 2010
3-D
Column
1
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The Future-Population
 Alberta will continue
to grow
 It will be dependant on
the strength of the rest
of Canada’s economy
 It will also depend on
the ability to provide
infrastructure in
Alberta
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3,800
3,700
3,600
3,500
3,400
3,300
3,200
3,100
3,000
2,007
3-D
Column
1
2,009
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The Future-Inflation
 I still don’t have
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confidence in these
numbers
They will come down
Housing prices have
stabilized
If the assumptions on
growth are low, so are the
inflation rates
Wishin and Hoping by
Dusty Springfield
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3.50%
3.00%
2.50%
2.00%
1.50%
1.00%
0.50%
3-D
Column
1
3-D
Column
2
0.00%
2008 2010
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So…what happens next
 We are going to continue to grow and rapidly.
 It will be driven by investment and population
growth.
 The government will begin putting significant
amounts of money into a “rainy day.”
 We still do not have a decision on how best to
manage growth.
 See you with the results in a year!
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THE KEY ASSUMPTIONS
 Oil is $78 in 2008
 Gas drops to $6.75 per gigajoule by
2009
 Canadian dollar remains .95=.99
 Canadian economy continues on a
modest growth path
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OILSANDS INVESTMENT
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16
14
12
10
Oilsands Investment
($billion)
8
6
4
2
0
1996
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1999
2002
2005
2008
2011
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Other things that you can do
with Music!?
 Hip to be Square by Huey Lewis and
the News
 Are you Experienced by Jimi
Hendrix
 It’s my Party by Leslie Gore
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The Last Slide of 2008
 The last song of the presentation is “The
End of the Road” by Boys to Men
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