The dominant theme for the energy sector in Alberta since the NDP took power has been a sweeping wave of uncertainty. Energy executives have been delaying investment decisions, and laying off employees. Until industry is comfortable with both energy price stability, and Provincial government policy, the uncertainty will remain.
Under this fog of uncertainty, it has been difficult to quantify the damage done to the Alberta economy.
Recent Provincial data, however, suggests that the Alberta economy is worse that people realize. Data pertaining to Alberta Employment Insurance, job vacancies, net migration, office space vacancy (sitting at 13.2%) and overall rig activity show that Alberta has in fact been lagging economically.
Employment Insurance
In April, 43,930 people received regular Employment Insurance (EI) benefits in Alberta, up 4,240 recipients from the previous month. Compared with April 2014, the number of beneficiaries rose by 13,070 or 42.4%. By comparison, the number of beneficiaries declined by 0.4% in Canada over the same period. Alberta now accounts for 8.4% of the total number of EI recipients in Canada.
What is clear, is that more Albertans in the wake of the oil price thrashing, have lost work and now are seeking financial aid from the Provincial government.
Source: Alberta Canada Economic Dashboard
Rig Activity
The Baker Hughes rig count for the Province of Alberta has shown a significant drop in the number of active rigs since July of last year. At that time, there were 248 rigs drilling for oil and gas. As of July 17, there is a mere 120 (less than half) operating in the field.
Source: Baker Hughes Rig Count
Job Vacancies
The Alberta government reported that in March 2015, the number of job vacancies in Alberta decreased by 25.0% from the same month in 2014 to 35,100 vacancies. Over the same time frame, Canadian vacancies increased 11.2% to 231,700. In March, Alberta accounted for 15.1% of the total number of job vacancies in Canada.
Although one may argue that the drop is a result of increased hiring, the reality is that the drop is a result of companies no longer requiring workers for lack of work.
Source: Alberta Canada Economic Dashboard
Net Migration
The lag in the economy is also reducing the number of people moving to Alberta.
The Provincial government reported that in the first quarter of 2015, net migration into Alberta totalled 7,723, compared with a net inflow of 19,326 in the same quarter of 2014, translating to a drop of 60%.
Net inter-provincial migration into Alberta was 6,732 in the first quarter of 2015, down 29.7% from a year earlier. Net international migration was 991 in the first quarter of 2015, down 89.8% from the first quarter of 2014, because of a sharp decline in the number of non-permanent residents. Alberta’s net inflow of international and inter-provincial migrants in the first quarter (7,723), though down substantially year over year, was still the second highest in Canada behind Ontario’s net gain of 9,896.