A mix of sun and cloud: Alberta’s economic outlook
Many things are moving in the right direction, but it is important not to underestimate the damage that has occurred
By Rob Roach, ATB Economics 10 June 2021 1 min read
Despite the ongoing challenges presented by the pandemic, higher-than-expected oil prices, rising vaccination rates and a strong recovery south of the border have led ATB Economics to raise our forecast for Alberta’s economy in 2021 from 4.1% growth to 5.0%.
Unfortunately, the contraction in 2020 was also higher than anticipated (8.2% versus 7.1%). As a result, Alberta’s economic output will still take until 2023 to surpass where it was before the pandemic.
The forecast assumes that public health restrictions will be eased over the summer and that the OPEC+ oil cartel will continue to limit the amount of new supply it adds to the global market.
Many things are moving in the right direction, but it is important not to underestimate the damage that has occurred over the last 15 months and the economic drag this presents going forward.
For example, oil prices are up, but this comes after last year’s crash, production curtailment in 2019 and the deep provincial recession of 2015-16.
Similarly, while employment levels are higher than before the pandemic in some sectors, they remain down in others. More jobs will come back as the economy reopens, but not all of them.
It will take time for enough jobs to be created to fill the hole left by not only the pandemic, but also the sluggish state of the economy going into it.
Still, there are lots of reasons to be optimistic and the economic ball is bouncing back strongly after being deflated by the pandemic.
You can read the full forecast report here.
Answer to the previous trivia question: The Canadian government decided (for the second time) to end the fixed exchange rate and allow the Canadian dollar to float (which it has done ever since) in 1970.
Today’s trivia question: Alberta’s population passed the two million mark in 1978. When did it pass the four million mark?