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ATB's Alberta Economic Outlook: Provincial economy improving but at a more moderate pace

ATB's Alberta Economic Outlook: Provincial economy improving but at a more moderate pace

Posted on: 5/22/2018 | Author: ATB Financial's Economics + Research Team

Alberta’s economy is once again expanding with most major economic indicators moving in the right direction.

This, from ATB Financial’s latest Alberta Economic Outlook released today. The Outlook provides insight into what has happened in our economy this year and what is likely to occur in the months ahead.

The key findings are:

  • Net interprovincial migration is expected to return to positive in 2018
  • Oil prices are higher than last year, while concerns about pipeline projects weigh on energy investment
  • Employment is growing but at a slow rate
  • Residential building permits are stable, the inventory of homes on the market is also rising
  • Non-residential construction activity is down due to a glut of recently completed commercial projects
  • Real GDP growth in 2018 of 2.7 per cent, led by non-energy sectors

At 4.9 per cent, the province’s growth was the fastest in the country last year. But for many Albertans, it hasn’t felt that way. Many people are still without jobs and facing financial hardship as a result of the downturn.

“Sentiment and empirical data are telling us contrasting stories,” said Todd Hirsch, ATB Financial’s Chief Economist. “In considering the latter, it’s clear that our province’s economy is expanding—but in new ways and at a more moderate pace than many Albertans are used to. For those people who are still without jobs and facing financial hardship as a result of the downturn, it continues to be a tough time, despite what the data are telling us.”

Jobs are being created, but the composition of the labour market is changing with more people working part-time in lower-paying sectors. In the energy sector, oil prices have improved, but flat investment and muted optimism prevail.

“Risks with respect to oil prices remain including the ongoing opposition to pipeline expansion,” said Hirsch. “If there is no resolution—or worse, a negative outcome on pipeline projects—the short- and medium-term outlook for the sector will dim.”

Still, there are reasons for optimism. The changing nature of our economy is creating new opportunities. Companies outside the energy sector are finding talented and experienced employees, and green shoots of greater economic diversity are poking up in, for example, agri-food, tourism, high-tech business services, and transportation and logistics.

ATB Financial’s economic forecast is calling for real GDP growth of 2.7 per cent this year and 2.3 per cent in 2019.

Read the complete ATB Alberta Economic Outlook (May 2018) and watch ​ATB's Chief Economist summarize it.

Alberta economic outlook, May 2018, graph

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