Alberta Sector Profile: Manufacturing

Highlights

• In 2021, one in twenty workers in Alberta worked in the manufacturing sector. The sector contributed $23.4 billion (8%) to the province's Gross Domestic Product (GDP).
• Though the manufacturing sector is made up of many subsectors, the main contributors to employment in 2021 were food manufacturing, fabricated metal manufacturing, machinery, and wood products.
• Recent investments by multiple levels of government contribute to an overall positive outlook for the manufacturing sector, though this is tempered by supply chain issues, pricing volatility, and labour shortages as older employees retire.

Provincial Overview

The manufacturing sector in Alberta is made up of 21 different subsectors, ranging from food, wood products, computer and electronic products, and many others. Employment activity in the manufacturing sector is mostly concentrated in food manufacturing (15.8%), fabricated metal product manufacturing (13.6%), machinery manufacturing (9.8%), wood product manufacturing (9.8%), and chemical manufacturing (8.7%).

Overall, there were 122,300 people employed in the manufacturing sector in 2021. The vast majority of those jobs were full-time (96%). The majority of employment in the manufacturing sector comes from core aged (25-54 years old) workers (73%). However, 20% of the workforce is aged 55 years and older, meaning that a large amount of looming retirements will likely create job vacancies in the sector.

Source: Statistics Canada Labour Force Survey; Statistics Canada Table: 36-10-0402-01 (GDP at basic prices, chained 2012 dollars); Statistics Canada Table: 36-10-0400-01 (GDP at basic prices, current dollars)

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In 2021, the sector contributed to:

• 5% of provincial employment
• $23.4B of provincial Gross Domestic Product
• 8% of the province's total GDP

In September 2022, the value of Alberta's manufacturing sales was $8.9 billion, an increase of 26.7% from September 2021. All product categories increased, with petroleum and coal products increasing the most, up 70.5% to $2.6 billion. ^[1]

Source: Statistics Canada Labour Force Survey, ESDC custom table

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Of those employed in 2021:

• 96% worked full-time
• 24% were female, 76% were male
• Employment distribution by age
• 15-24 years: 7%
• 25-54 years: 73%
• 55+ years: 20%

Sector Trends

Despite employment disruptions caused by periodic lockdowns, employment remained fairly steady in the manufacturing sector during the COVID-19 pandemic. Employment in 2020 was at 125,800 in 2020. In 2021, employment had decreased by 3% to 122,300.

Employment in the food manufacturing subsector was 19,300 in 2021, down almost 20% from 2020. Within the food manufacturing subsector the employment situation remains tightly related to domestic spending patterns. The initial stages of the pandemic brought upon a significant increase in spending at grocery stores, as restaurants closed down and Canadians replaced going out for dinner with buying more expensive goods at grocery stores, including manufactured food products. However, in 2022, inflation has increased drastically and prices at grocery stores have climbed. This could push households to be more frugal in their food choices and lead to people buying less manufactured food products as they reduce costs by doing meal preparation at home. ^[2]

Source: Statistics Canada Labour Force Survey, ESDC custom table

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Top Subsectors by Employment

Year	Food	Wood Product	Fabricated Metal	Machinery
2011	18,600	13,100	18,900	15,900
2012	17,300	15,900	21,300	19,000
2013	25,100	13,700	21,000	17,400
2014	22,300	12,300	24,500	21,600
2015	24,700	13,400	21,700	16,800
2016	20,600	10,800	16,300	12,300
2017	20,700	7,900	20,100	12,400
2018	22,900	9,200	20,800	14,400
2019	25,900	7,700	17,000	16,400
2020	24,400	9,900	18,500	13,700
2021	19,300	12,000	16,600	12,000

Note: Figures shown are employment estimates

Employment in fabricated metal product manufacturing in 2021 was 16,600, a 10% decrease from 2020. Similarly, employment also decreased annually in the machinery manufacturing subsector by 12%. Much of the business activity in these two sectors is tied to investment from the oil and gas sector. Despite record high energy prices and record levels of oil production in 2021 and 2022, capital investment in the oil and sector has been relatively low. By November 2022, annual capital investment in Alberta's crude oil and gas sector reached $17 billion, up 56% compared to 2021, but still 37% less than historic highs set in 2014. The Alberta Energy Regular states that capital expenditures over their 10-year forecast period (2021-2031) will remain below 2014 peak levels. ^[3]

Source: Statistics Canada Labour Force Survey, ESDC custom table

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Manufacturing Employment

Year	Employment
2011	135,800
2012	136,800
2013	140,800
2014	142,900
2015	138,400
2016	116,300
2017	117,000
2018	128,400
2019	135,400
2020	125,800
2021	122,300

Note: Figures shown are employment estimates

Employment Outlook

As manufacturing in Alberta is divided into so many subsectors, the employment outlook considers the different factors in each major subsector. Overall, while there are promising investments in food and chemical manufacturing, the manufacturing sector continues to face supply chain disruptions, pricing volatility, and labour shortages. Those challenges have been aggravated by the pandemic and are unlikely to end any time soon, while labour shortages will intensify as more workers will retire over the next decade. ^[4]

The outlook for food manufacturing is promising in the near to medium term as exports should continue to grow. In 2021, the value of food exports rose by 17.3% nationally. Exports have also been up by another 12.3% over the first six months of 2022. The Conference Board of Canada states that real exports will increase by 4.7% in 2022, another 5.9% in 2023 and by 5.8% annually between 2024 and 2026. ^[5]

Relatively low capital investment from the oil and gas sector will decrease demand in these subsectors in Alberta. However, there are has also been positive news recently for the fabricated metal product and machinery manufacturing sectors. For instance, in September 2022 the Airplane manufacturer De Havilland Aircraft of Canada Ltd announced that it was set to begin construction in 2023 on a large-scale manufacturing facility and airfield just east of Calgary in Wheatland County. Upon completion, which could take up to 15 years, the facility will employ an estimated 1,500 people. Also, in September, the Government of Canada provided $150 million to Calgary-based Tenaris, a global manufacturer and supplier of steel pipes and related services, for infrastructure upgrades. The funding supports jobs in Calgary and across the company's four other facilities in Alberta. ^[6]

While the chemical manufacturing subsector only accounted for 8.7% of total employment in the manufacturing sector in 2021, that proportion will likely increase in the short to medium term. In 2022, there were multiple major investments in hydrogen and other clean renewable energy projects that were announced across Alberta. In September 2022, WSP was awarded the detailed design for two hydrogen production and refueling facilities in Alberta. The facilities, located in Calgary and Edmonton, are being constructed to support Canada Pacific's (CP) Hydrogen Locomotive Program. ^[7] In October 2022, Japanese trading company Itochu Corp and Malaysia's state energy firm Petronas stated that they were exploring the feasibility of one of the world's largest production facility of low-carbon ammonia and methanol in Alberta. In 2021, Itochu's rival, Mitsubishi Corp and Shell Canada signed a pact to produce low-carbon hydrogen in Alberta. ^[8] Finally, in November 2022, the federal and provincial governments said they would contribute $300 million and $161 million, respectively, to entice Pennsylvania-based Air Products and Chemicals Inc. to build a $1.6-billion hydrogen facility outside Edmonton. ^[9] These investments, and others, will likely support job growth in the chemical manufacturing subsector in the medium to long term.

Alberta has embraced a strategy to expand and diversify the petrochemicals manufacturing industry as part of its larger Natural Gas Vision and Strategy, announced on October 6, 2020. The government proposes that supporting the province's capacity to produce petrochemicals is a means to attract investment, capitalize on the education and skills of Albertans, capture a larger share of the commodities value chain, and to mitigate and avoid some of the market access challenges that currently face crude oil, bitumen and natural gas. ^[10]

Occupation of Interest: Manufacturing Managers (NOC 90010)

Manufacturing managers oversee activities in an organization that are directly related to making a product. In other words, they oversee how people, materials, equipment, energy, money and information inputs are converted into useful goods and services. They are employed by manufacturing plants across the province, primarily in Fabricated metal products, Food, beverage and tobacco products, Machinery, and Chemical manufacturing.

Source: Statistics Canada Labour Force Survey, ESDC custom table

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Occupational Employment

Year	Employment
2011	4,000
2012	4,000
2013	5,800
2014	9,300
2015	5,100
2016	4,900
2017	6,700
2018	7,100
2019	5,600
2020	7,000
2021	6,600

Note: Figures shown are employment estimates

Manufacturing managers earn a median wage of $44.23/hour, a higher median wage than B.C. and Saskatchewan, but lower than Manitoba. In Alberta, the median wage for this occupation is highest in Calgary at $46.15/hour, significantly more than the national median hourly wage for this occupation ($43.00/hour) ^[11] . To be employed as a manufacturing manager, completion of a college or university program in engineering or business administration may be required; and as a supervisor, five to ten years of supervisory experience in manufacturing is typically required.

The employment outlook will be moderate for Manufacturing managers (NOC 90010) in Alberta for the 2022-2024 period. Additional occupational information can be found here.

Endnotes

1. Government of Alberta (November 15, 2022) Manufacturing Sales ↑

2. Conference Board of Canada (September 16, 2022) Capacity Growth Boosts Outlook for Food Manufacturing (account required) ↑

3. Alberta Energy Regulator (May 2022) Capital Expenditures ↑

4. Prairie Manufacturer Magazine (March 16, 2022) Food Manufacturing is Booming in Western Canada. ↑

5. Alberta Energy Regulator (May 2022) Capital Expenditures ↑

6. Innovation, Science and Economic Development Canada (September 27, 2022) Minister Ng joins workers to celebrate $150M Tenaris investment in Canada ↑

7. WSP (September 15, 2022) WSP to Design Hydrogen Facilities for ATCO Group and Canadian Pacific in Alberta ↑

8. Reuters (October 2, 2022) Japan firms eye ammonia, methanol projects in Canada, Alberta minister says ↑

9. Financial Post (November 8, 2022) 'This is the evolution of energy': Ottawa and Alberta kick in $461 million for clean hydrogen facility ↑

10. Mondaq (October 22, 2020) Canada: Alberta's Proposed Pivot To Petrochemicals: A Fresh Investment Landscape In The "New Normal" ↑

11. Government of Canada Job Bank. Wages for Manufacturing Managers. Accessed November 18, 2022. ↑