After experiencing a modest decline in the first quarter of 2018, employment in Metro
Edmonton stabilized and began to expand over the remainder of the year. Real Gross
Domestic Product (GDP) for 2018 is estimated to be in the range of 2.8 per cent for the City of Edmonton. This will decelerate slightly to 2.6 per cent in 2019.
With continuing employment growth, average weekly wages in 2018 increased as the number of hours worked rose and employment in some high-paying sectors, such as the energy and manufacturing sectors, recovered some of the losses they saw in 2016. However, the increase in average weekly wages was below the rate of inflation, as measured by the consumer price index (CPI), at several points in 2018. This acted to constrain consumer spending. Looking ahead, inflation should slow in 2019 but will remain in the 2 per cent range. Lower inflation will help preserve the real value of incomes in Metro Edmonton and support consumer spending.
In 2019, growth will continue as the economies of the province and the city continue to recover; this is assuming West Texas Intermediate (WTI, the North American benchmark oil price) holds within the $US 55 - $US 65 range. Growth rates, however, will be relatively modest when compared to those experienced between 2010 and 2014.
Moderate growth prospects for the global economy and continuing uncertainty as to the expansion of energy export infrastructure will mean that Canadian energy prices are likely to be volatile over 2019. While prices improved late in 2018, there is considerable downside risk with respect to energy prices that Alberta firms receive. This could have negative implications on the economic outlook for Edmonton and Alberta.