Troy Media – By Dan Sumner
Alberta’s economy has been performing at the top of its class so far in 2011; however, indications are surfacing that aspects of the provincial economy stopped to catch their breath recently.
Manufacturers in the province saw the value of their shipments dip for the second consecutive month in June, falling to $5.59 billion. Over the last two months the seasonally adjusted value of manufacturing shipments has fallen by nearly four per cent, indicating that GDP growth in Alberta has softened during the second quarter.
From the trough of the recession to April of this year Alberta manufacturing shipments had been on a nearly unstoppable increase, rising above levels seen in 2006 and 2007. Put in this context, the recent hiccup in shipments is not as serious and may have been inevitable.
The Canadian manufacturing sector followed a similar path in June, with shipments declining by a larger-than-expected 1.5 per cent. This decline caps off a very poor second quarter for the Canadian economy, in which Q2 GDP growth (scheduled to be released later this month) may be below one per cent.
The slowdown in the national economy, combined with the recent announcement by the US Federal Reserve stating that U.S. rates are likely to remain at current record low levels until mid-2013, provides further evidence the Bank of Canada will hold off raising rates until next year.
Moving forward, as energy prices have softened and the global economy has continued to struggle, growth in Alberta manufacturing shipments may remain soft over the next couple months. Beyond that, fortunes in the sector will continue to be tied to activity in energy sector.
Dan Sumner, ATB Financial
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Alberta economic snapshot for July 16, 2011
Alberta manufacturing hitting its stride
Winners and losers in the Alberta job market
A ray of light for the U.S. economy?
Drilling activity in Alberta ramping up
What a U.S. default could mean for Alberta
Alberta economic snapshot for July 30, 2011
Ontario economic snapshot for July 30, 2011
Tags: Alberta Manufacturing, Bank of Canada
Category: Alberta, Business
