Alberta’s economy returning to pre-recession levels

December 15, 2010

CALGARY, AB, Dec. 15, 2010/ Troy Media/ – It has definitely taken the Alberta economy quite a while to recover from the 2008/09 recession, but thanks to a strong push in the second half of 2010, Alberta’s economy is making strides towards returning to pre-recession levels.

Alberta manufacturing firms sold $5.24 billion worth of merchandise in October 2010, the highest amount since November 2008 when manufacturing shipments collapsed alongside the recession. In October, total shipments rose 1.9 per cent month-over-month, marking the fourth consecutive month of solid gains for shipments (see graph).

Nationally, manufacturing shipments followed the same trend, rising 1.7 per cent on the month. Compared to a year ago manufacturing shipments are up 9.0 per cent – not bad considering the current state of the Canadian dollar and the U.S. economy.

With the steady gains in shipments over the last four months, Alberta’s manufacturing sector is getting close to where it was from 2005-2008. However, it is still going be quite a while before shipments reach the record levels observed in summer 2008. That year, shipments were boosted by record high prices for things like gasoline, diesel and chemical products, a result of oil (the main input) approaching $US 147.

Alberta’s manufacturing sector forms a very large part of the economy here and the strong gains seen recently are definitely a sign that the broader economy improved in 2010. Moving forward, it will be interesting to see if shipments can continue to buck the headwinds caused by the strong loonie and weak U.S. economy.

| Dan Sumner, ATB Financial