Alberta's Economic Outlook Catherine Rothrock A/Chief Economist November 6, 2015

Oil price forecast downgraded 2 WTI Oil Price Source: Alberta Energy

Implications of lower oil prices to producers 3 Lower revenues Lower Cost Pressures -Condensate -Royalties/taxes -Labour -Fuel -Construction prices Weaker CDN$

Lower oil prices hit the economy 4 Real GDP Growth Sources: Statistics Canada and Alberta Treasury Board and Finance

Loonie has tumbled, cushioning oil price impact 5 Canadian Dollar exchange rate Sources: Bank of Canada and Haver Analytics

Rig activity down over 50% 6 Number of Alberta active rigs drilling Source: Canadian Association of Oilwell Drilling Contractors (CAODC)

Investment to improve slowly 7 Change in Alberta Public and Private Non-Residential Investment Sources: Statistics Canada and Alberta Treasury Board and Finance

Oil production growing despite price drop 8 Alberta Oil Production and Western Canadian Select Heavy Oil Benchmark Price Sources: Statistics Canada and Alberta Energy

Firms seeking ways to cut costs 9 Alberta Construction prices and Average Weekly Earnings Sources: Statistics Canada and Alberta Treasury Board and Finance

Manufacturing exports to pick up after short-term decline 10 Change in Alberta Real Manufacturing Exports Sources: Statistics Canada and Alberta Treasury Board and Finance

Crop production down in Alberta Crop Production Source: Statistics Canada

Transportation investment surges as production ramps up 12 Transportation & warehousing investment, share of Canadian investment Source: Statistics Canada *2015 is investment intentions

Labour market lags oil prices 13 Alberta employment growth and WTI price Sources: Statistics Canada and Energy Information Administration

Unemployment rises amid falling job vacancies 14 Alberta unemployment rate and job vacancy indicators* Source: Statistics Canada *3-month moving average

Labour market conditions in Alberta soften 15 Labour Market Indicators Sources: Statistics Canada and Alberta Treasury Board and Finance

People still coming in early Net Population Movement for Alberta (April 1 to June 30, 2015) Source: Statistics Canada

Natural increases and immigration to drive population gains 17 Alberta Population Growth by Component Sources: Statistics Canada and Alberta Treasury Board and Finance

Albertans reign in vehicle spending 18 Alberta retail sales growth Source: Statistics Canada

Consumers keep spending, but at a much slower rate 19 Change in Alberta Nominal Household Consumption and Income Sources: Statistics Canada and Alberta Treasury Board and Finance

Record migration has spurred demand for new housing 20 Housing Starts and Total Net-Migration Into Alberta Sources: Canada Mortgage and Housing Corporation, Statistics Canada and Alberta Treasury Board and Finance

Edmonton's market has held up relatively well 21 Alberta existing home sales indexed to October 2014 Source: Canadian Real Estate Association

Long-standing economic prosperity 22 Annual nominal GDP per capita Sources: Statistics Canada, Alberta Treasury Board and Finance and TD Economics

Economic Synopsis Oil prices down over 50% since June Contraction in 2015, with economy progressively picking up over the medium term. Construction catching up this year. Opportunities exist in a lower cost environment. 23

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