Each week, the provincial government releases an update to the Alberta Economic Review and Indicators at a Glance. I decided to finally take a look at the most recent one, and here’s what I found.
Alberta Activity Index
The first metric in the data was the Alberta Activity Index, which is a weighted average of the following 9 monthly indicators:
- Average weekly earnings
- Retail trade
- Wholesale trade
- Manufacturing shipments
- New truck sales
- Housing starts
- Rigs drilling
- Oil production
Introduced in 1981, the AAX had steadily increased since then, other than a dip in 2008/2009 and again in 2014/2015. Since May 2016, the AAX had recovered from the previous drop and had been consistently rising, hitting its second highest level ever in May 2019. Unfortunately, it’s dropped every month since. Even Jason Kenney’s “Job Creation Tax Cut” in July 2019 didn’t stem the decline.
According to last week’s update, the AAX increased by 2.2% over 2017 but then decreased by 0.5% last year, the UCP’s first year in power. And that’s just the pre-pandemic economic data.
Employment under the NDP’s last year had increased 1.9%. It also increased under the UCP’s first year: by 0.5%. The participation rate dropped from 71.9% in 2018 to 71.4% in 2019, which bumped the unemployment rate to 6.9% last year from the 6.6% it was the year before.
Weekly earnings had increased to $1,165 in 2019 from $1,149 in 2018; however, they were $1,129 in 2017, a 1.7% increase in 2018 , compared to a 1.4% increase last year.
Again, remember, these are all pre-pandemic numbers.
In 2018, retail sales were $81.9 billion in Alberta, an increase of 2% over 2017. They dropped by nearly a full percentage point in 2019 to $81.1 billion.
New vehicle sales were also down—222,000, compared to 237,000—but they were down in 2018 over 2017, as well. That being said the 2018 drop of 4.8% was smaller than the 6.1% drop in 2019.
The consumer price index was up 1.8% in 2019, compared to an increase of 2.4% in 2018.
Housing starts were down by 11.4% in 2018, but they were up by 4.8% in 2019.
The number of consumer bankruptcies had dropped by 1.7% in 2018, when compared to 2017, but they were up by 13.5% in 2019. In fact, not only were 2019’s 5,589 bankruptcies up 13.5% over 2018’s 4,925 bankruptcies, they were 11.6% higher than the roughly 5,008 bankruptcies in 2017.
During 2018, Alberta’s business sector exported $117.7 billion worth of goods, a 17.1% increase over the $100.5 billion in 2017. The 2019 exports totalled $117.2 billion, a 0.4% drop.
Energy exports alone were higher in 2019 at $84.5 billion over 2018’s $83.5 billion, an increase of 1.2%. However, 2018’s exports were 19.9% higher than what was exported in 2017.
2019 saw nearly a third fewer rigs drilling (92) than there were in 2018 (133), which itself was 1.6% higher than the number drilling in 2017.
Manufacturing shipments were down in 2019 ($76.2 billion) from 2018 ($76.8 billion), which was 7.2% higher than 2017.
Wholesale trade was also lower last year (0.9%) than it was in 2018, which was up by 5.1% over 2017’s trade numbers.
Remember, these numbers are for only 2019 and don’t include the pandemic numbers or the numbers related to the massive drop in oil prices.
What these numbers tell us is that even with his corporate tax cut, Kenney was unable to maintain—or even exceed—the economic growth that Notley saw during her last full year in office.
To be fair, Kenney had been at it for only a little over a year, while Notley had 4 years to turn things around. So, we’ll see after 3 years if Kenney can accomplish what Notley did economically, while having less money in his pocket to do so.
(Remember, lower taxes means less government revenue.)
And that’s assuming he gets out of the economic hole the pandemic and low oil prices have created for the province.