Alberta will lead the country in economic growth next year after falling behind the national average this year, Craig Wright, chief economist for RBC, told the audience during the presentation of his Market Outlook 2010 report on the provincial, federal and international economies.

Growth of investment in the energy sector combined with positive sales forecasts, stabilized pricing models and seasonal hiring needs will boost employment as the industry prepares for winter oil and gas production.

On June, TD Economics had already forecast that the province’s real gross domestic product growth will be 3.5 per cent in 2011 after a 2.8 per cent hike in 2010. It forecasts real GDP growth of 3.6 per cent this year and 2.5 per cent in 2011 for the entire Canadian economy.

Another report by Scotiabank said that Alberta will experience a sharp economic rebound during 2010 and it will  lead all of the Canadian provinces in terms of GDP growth at 4.1%.

For 2011, Scotiabank is forecasting that Alberta’s economic growth will be 3.4 per cent while Canada as a whole will average 2.7 per cent.

A strong pickup in investment will fuel growth in the energy and manufacturing sectors,

“Investment has perked up in the oil sands, as easing costs and higher oil prices revived investment intentions in late 2009, with $2.2 billion in outlays scheduled for 2010 alone. Renewed activity in the industry will lead to significant benefits flowing through the economy, with manufacturing and services all heavily tied to conditions in the energy sector. While the bulk of investment will stem from oil sand development and tight oil plays, recent revisions to the province’s royalty framework are a major positive for the natural gas industry.”

The report also showed how the province has also made efforts to diversify its economy with the development of its health sciences industry. Notably, the Alberta Innovates initiative provides funding for a wide variety of domains, including health, energy and the environment.

Alberta’s economy is one of the strongest in Canada, supported by the petroleum industry and, to a lesser extent, agriculture and technology. According to the Fraser Institute, Alberta has very high levels of economic freedom. On its Canadian Provincial Investment Climate Report, Alberta continues to rank top  setting the pace and leading the country in terms of creating and maintaining a positive investment climate. The report also claims that it is “by far the most free economy in Canada, and is rated as the 2nd most free economy of all U.S. states and Canadian provinces.”

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Tags: Alberta, employment, GDP, oilsands