Earlier this month, Rob Roach, an economist with ATB Economics, posted the following tweet:
Doug Schweitzer, Alberta’s economy minister, was pretty happy to see the tweet and even retweeted it.
He wasn’t the only one though. His own press secretary did, too, as did the press secretary for the health minister, the press secretary for the premier, and the premier’s issues manager.
But I wonder if they even read the article that Rob linked to or looked at the data. Did they just see the incline on the graph and think, “Oh, look, upward growth! It’s proof what we’re doing is looking”?
But, as I’ve mentioned several times already, this graph shows manufacturing sales value, not manufacturing sales volume.
Take a look at this quote from the article by Roach’s associate at ATB Economics, Siddhartha Bhattacharya, for example.
On the back of higher oil prices, refined petroleum products climbed $276 million (+11.4%) higher in March and drove 79% of the total monthly increase.
Did you notice that? “Higher oil prices”. Oil prices were higher up in March 2022, compared to just the month before, so it makes sense that the value of oil-related exports would be higher.
Not only that, but as Bhattacharya points out, the increase in oil-related products accounted for nearly 80% of the total additional value in manufacturing sales out of Alberta.
Remember as well that inflation is increasing. For example, Alberta’s Economic Dashboard reports that the consumer price index grew by 1.9% in Alberta during March 2022.
Manufacturing sales in February 2022 came to about $8.488 billion. The following month, they had increased to $8.838 billion. That’s a jump of 4.12%. If inflation for that month was nearly 2%, then that’s a significant portion of the increase in sales value.
And if 80% of your increase is tied up in increases driven by global commodity markets and nearly half of the increase is via inflation, you have to wonder how much of the increase can be attributed to actual increases in economic output, which Schweitzer et al. would have us believe.
Not only that, but every province saw increases in manufacturing sales, four of which were higher than the increases Alberta saw and one was just barely behind Alberta.
So, we’re basically middle of the pack.