Major City Insights

Edmonton

July 31, 2024

Overview
Labour and employment
Economic indicators
Construction and real estate

Economy floats on an incoming migrant tide

Oil production is an important economic underpinning for Alberta. Its effects trickle through to Edmonton, the provincial capital. A healthy oil price is thus supporting ongoing local economic growth even as Canada’s economy weakens.
Oil prices have risen this year due to geopolitical unrest and output trimming by the OPEC+ producer group.
Alberta’s oil producers are further enjoying completion of the Trans Mountain pipeline expansion. The price of Western Canadian Select, the local benchmark, has averaged over US$60 this year, up 11 per cent from last year. Such growth outstrips the roughly 3 per cent gain in the more commonly cited West Texas Intermediate oil grade.
Edmonton’s most significant current economic underpinning though is burgeoning population growth propelled by newcomers. Net in-migration hit a record high last year. Elevated federal immigration targets are bringing international arrivals, while the healthy local economy and relatively affordable housing are luring other Canadians.
Edmonton’s real GDP will rise by 1.2 per cent in 2024, after expanding 2.5 per cent in 2023. We expect faster 2.7 per cent growth in 2025, then annual hikes averaging 2.8 per cent in 2026–28.
The city’s economy will thus perform well in the Canadian context. We expect Canadian GDP to rise by 0.7 per cent in 2024, 2.3 per cent in 2025, and an average of 2.3 per cent annually in 2026–28.

Labour and employment

Edmonton’s employment jumped 5.1 per cent, or 41,125 jobs, in 2023 to a record high near 849,650. That followed a 3.9 per cent hike in 2022 and a 2021 rebound of 8.9 per cent from the COVID-induced losses of 2020.
The 2023 job increases were clustered in services industries, paced by professional and technical services. Goods sector employment shrunk, with construction falling the most.
For 2024, we expect slower 2.1 per cent (17,500 positions) employment growth. This would lift total employment to near 867,150 in 2024, up 17.8 per cent from 2014. Annual hikes averaged a decent 1.7 per cent over this period, even with an 8.4 per cent drop in the 2020 COVID year.
Advances will again be paced by the services sector with a gain of 13,300 jobs (2.0 per cent). The healthcare services sector will see the largest increase—a net new 7,200 positions for a 6.2 per cent gain—lifting the industry’s employment to a record 124,600 jobs.
Goods sector employment will grow by a relatively subdued 4,160 jobs (2.4 per cent) in 2024. The construction sector will spur the increase, adding nearly 4,000 workers (4.6 per cent) and putting construction employment near 90,800, still below its 2015 peak of 100,700 employees.
Our call is for faster 3.3 per cent total employment growth (28,300 jobs) in 2025, led by gains in healthcare services, in professional, scientific, and technical services, and in arts and entertainment.
We see further yearly employment gains in Edmonton averaging 2.1 per cent in 2026–28.
Edmonton’s unemployment rate clocked in at 6.0 per cent in 2023, up slightly from its seven-year low of 5.9 per cent in 2022, but down from the COVID-era readings of 8.7 per cent in 2021 and 11.9 per cent in 2020.
We think the unemployment rate will edge up to 6.4 per cent in 2024 as the labour force increases slightly faster than employment. The rate will ease to 6.0 per cent in 2025, then stabilize near 5.5 per cent in 2026–28.

Economic indicators

Edmonton’s brisk resale market will lift output growth in finance, insurance, and real estate, the city’s largest industry, to 0.8 per cent in 2024, following a tiny 0.1 per cent advance last year.
Persistent housing market strength will produce considerably faster 3.3 per cent growth in the finance, insurance, and real estate industry in 2025. Annual growth will average 3.3 per cent between 2026 and 2028.
Uneven oil prices in 2023 limited output growth in the primary and utilities sector, Edmonton’s second-largest industry, to an estimated 2.1 per cent, following increases of 6.5 per cent in 2021 and 5.9 per cent in 2022.
This year’s better oil pricing will outweigh general economic cooling to produce 3.2 per cent primary and utilities output growth and a further 2.8 per cent increase in 2025. We expect 2.2 per cent average annual growth for this sector in 2026–28.
Edmonton retail sales rose a solid 6.3 per cent in 2023 after rising 10.8 per cent in 2021 and 6.6 per cent in 2022. Growth has been fuelled by ongoing healthy employment and disposable income increases.
A more modest 1.3 per cent retail sales gain is our call for 2024. But accelerating employment growth in 2025 will lift sales by 3.3 per cent. Annual sales advances will remain in the mid-3 per cent range through 2026 to 2028.
This year’s moderating retail sales growth will cut retail trade industry expansion to 0.2 per cent from 4.8 per cent in 2023. We expect firmer retail sales growth to lift retail trade output by 2.3 per cent in 2025, and then by a slightly faster rate each year from 2026 to 2028.
Edmonton’s population grew a record 4.8 per cent, or nearly 73,700 people, in 2023 thanks to a diverse mix of in-migrants. Inflows were led by a record 44,700 net international migrants, nearly double the previous year’s high of 27,470 and well above Edmonton’s 20-year average of 11,720.
Net international migration will pull back to near 39,300 people in 2024 and to about 28,900 in 2025 but remain above its 20-year average through the forecast period.
Net interprovincial migration also hit a record high of 18,900 people in 2023, about quadruple its 2003–22 average near 4,100. Edmonton’s affordable housing and beckoning job market are central underpinnings.
Net interprovincial migration will also cool but remain solid at just under 15,000 people in 2024. Such inflows will ease to roughly 14,000 people in 2025 and 10,400 people in 2026. While greater declines are expected in 2027 and 2028, net inflows from other provinces should remain slightly above their 20-year average.
Edmonton also enjoyed net inflows of 3,164 people from other cities in Alberta in 2023, just below the 20-year average of 3,235. We expect Edmonton’s net intercity migration to strengthen slightly, beginning with about 4,300 arrivals in each of 2024 and 2025. Net intercity migration also should remain slightly above its 20-year average throughout our forecast.
Ongoing net in-migration will boost Edmonton’s headcount by 4.3 per cent in 2024. We see additional 3.4 per cent population growth in 2025, with moderating advances to follow.
The city’s professional, scientific, and technical services industry has grown steadily in recent years, as output expanded 5.0 per cent in 2021, 3.9 per cent in 2022, and 3.4 per cent in 2023. This year will see a slower expansion of only 0.2 per cent, but we expect a 2.2 per cent output gain in 2024, then annual growth between 2 and 3 per cent in 2026–28.
News from the sector includes commencement of the Edge Fund, a new City of Edmonton program to support tech and innovation. Grants range from $100,000 to $750,000. The fund has already given Zero Point Cryogenics $723,020 to scale up production of special refrigerators for quantum computing applications.
The Bank of Canada’s rapid interest rate increases have tamed inflation across the country, including Edmonton. The city’s CPI growth cooled to 2.8 per cent in 2023, down from 6.3 per cent in 2022. It will clock in at 2.3 per cent this year and about 2.0 per cent annually in 2025–28.

Construction and real estate

Demand for existing Edmonton homes has been underpinned by a healthy economy and surging population growth, despite Canada’s high interest rates. Against this backdrop, sales jumped more than a third from a year earlier on average in the six months to April.
Rising sales have faced easing listings, so the area’s resale market is approaching sellers’ territory. This could attract more listings, which would weaken the market’s stance, although the market is expected to remain balanced at worst.
Local pricing is healthy. The city’s average resale price rose for five straight months to April, and year-over-year price growth averaged 8.1 per cent over this period.
Rising prices are slightly eroding Edmonton’s affordability advantage. During 2022, the city’s average resale price was about 43 per cent below the national average, but the gap averaged less than 40 per cent by April of this year.
Edmonton’s new home market is weakening modestly. CMHC data show that inventories of ground-oriented homes (singles, semis, and rows) are up slightly. This could be due to these units’ relatively high price, because inventories of more affordable new apartments continue to drop.
Rising unsold stocks, along with persistently heavy volumes of units under construction, cut total Edmonton starts almost 10 per cent to 13,184 units in 2023. Both single-detached and multiple construction fell, though singles fell relatively faster.
We forecast a slightly higher 13,719 starts in 2024, but a larger jump to about 15,245 homes in 2025. Starts will remain near this level each year in 2026–28.
New home construction could be aided by $175 million in federal funding allocated to the city under the Housing Accelerator Fund. The money is designed to help build 5,200 housing units, of which up to 1,900 units are expected to be “affordable.”
Work on the $11.5-billion Dow Chemical plant upgrade is poised to start this year. The project will vastly expand Dow’s production of polyethylene, typically used for plastic bags and food containers. Dow expects a peak of 8,000 construction jobs and roughly 500 permanent positions.
With a long-term lease ending this year, the city is set to take over ownership of the Citadel Theatre—and start paying $1.36 million in annual repair and maintenance costs as well as up to $375,000 to maintain capital projects. Larger capital spending would cost about $56.2 million over 10 years.
All told, we expect Edmonton’s construction output to dip 1.3 per cent in 2024, following a 0.8 per cent increase in 2023.
The industry will expand 2.9 per cent in 2025 and a further 3.3 per cent in 2026 as work on the Dow plant ramps up. Construction growth will hover near 3.5 per cent in 2026–28 as the project’s peak construction passes.
Despite these advances, the construction industry’s 2025 output will remain about a quarter below its 2014 peak.