Alberta Back to Growth in 2017
There’s no denying that the last couple of years have been difficult for Albertans and the provincial economy. But in 2017, it is expected to get better.
Today, ATB Financial is releasing its latest Alberta Economic Outlook, providing insight into what may happen in the months ahead.
To start, there has been a slight improvement in energy prices. There’s also been greater certainty around increased pipeline access. Together, these things have lifted sentiment within Alberta’s petroleum sector which will cause investment in projects and employment in the sector to tick higher; however, investment will remain much softer than during 2010-2014. Oil prices are forecast to remain in the range of $US 50-60 for the WTI benchmark price.
Better results are also expected for agriculture, agri-food (food processing) and tourism; some of which could see record years in 2017. Even though cattle ranchers remain uneasy about bovine tuberculosis and beef prices are down, wheat, canola and barley receipts should be stable and offset potential challenges. Meanwhile, tourism could experience another record-setting year. As Canada turns 150, the Canadian dollar remains relatively weak which means international visitors should increase.
Even though growth will return to Alberta’s economy this year, the province’s labour market will lag in recovery. Employers will likely remain hesitant to hire, at least for the first half of the year, and this will keep the unemployment rate close to eight or nine per cent. Gradual improvements in the second half of the year may encourage more hiring and some growth in employment.
In terms of construction, building in the province is set to slow down this year. The completion of major office towers in downtown Calgary will continue to push vacancy rates to record highs and cause commercial building to suffer. Some increase in government projects and infrastructure could provide a welcome counterweight. Housing starts will be lower than last year but still close to the 10-year average.
ATB is forecasting real GDP growth of 2.2 per cent this year and 2.3 per cent in 2018. This represents an end to the 2015-16 recession and welcomes in an era of modest growth.
Read ATB's Alberta Economic Outlook here.