The report said sales are on a rising trend after dipping to 220,000 in 2016 as the province was in the depths of recession due to the collapse in oil prices starting in the latter half of 2014.
Over the long term, auto sales in Alberta averaged 166,000 on an annual basis between 1995 and 2005 and 232,000 between 2006 and 2015.
“So far in 2018, vehicle sales in Canada have declined by 0.9 per cent year over year compared to the first eight months of 2017, which is in line with expectations of a slight decline in sales in 2018 after record levels last year,” wrote Juan Manuel Herrera, Scotiabank economist and author of the report.
The report said the auto market downturn in Canada as a whole stands in contrast to the strength in the Canadian economy, which expanded by an annualized rate of 2.9 per cent quarter over quarter, expanding in the second quarter after a weak start to the year.
“While the pace of employment growth has slowed in 2018, wages are expanding at a solid pace and the unemployment rate sits at its lowest level in over a decade,” said the report. “The ratio of new vehicle sales to prime-age population is still near record highs at the same time as rising interest rates may be restraining big-ticket purchases by Canadian households.”
In the first six months of this year, the annualized rate for Alberta sales came in at 237,000. “The contraction in sales in Alberta follows from a year when auto purchases were driven by a strong economic recovery and vehicle replacement following the Fort McMurray wildfires,” said Scotiabank.
It said Ontario posted a slight year-over-year increase in sales in July, while vehicle purchases in Alberta and B.C. – over a fifth of the Canadian auto market combined – fell by over 10 per cent year over year in each province.
Mario Toneguzzi is a veteran Calgary-based journalist who worked for 35 years for the Calgary Herald, including 12 years as a senior business writer.