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Alberta posts strong real GDP growth, still challenged by unemployment: ATB’s Alberta Economic Outlook

Alberta posts strong real GDP growth, still challenged by unemployment: ATB’s Alberta Economic Outlook

Posted on: 11/20/2017 | Author: ATB Financial's Economics + Research Team

Alberta’s economy is gaining momentum, with oil and gas, agriculture, food processing, tourism, retail and manufacturing all experiencing growth. Still, challenges remain, with unemployment being the most significant hurdle for Albertans as we head into 2018.

Today, ATB Financial is releasing its latest Alberta Economic Outlook, providing insight into what has happened this year and what may happen in the months ahead.

The key findings are:

  • Alberta has emerged from two years of recession with real GDP growth of around four per cent in 2017, likely the strongest in Canada.
  • Retail and housing sector performance have improved.
  • Oil prices have steadied, and have begun to inch higher (currently around $US 55 per barrel).
  • Alberta’s energy sector will grow this year.
  • Tourism, agriculture and agri-food will continue to show steady growth.
  • Net out-migration to other provinces is likely to taper off but continue at a slower rate next year.
  • Alberta is expected to see a stubbornly high unemployment rate in 2017 and 2018.

The four per cent economic growth in 2017 is largely due to a resurgence of Alberta's energy sector and the resilience of the province’s retail and housing sectors.

With stronger pricing, the energy sector has stabilized and is now experiencing growth in business investment, especially in conventional drilling. These advances in investment have been critical to Alberta’s turn-around in 2017.

Housing and retail have also shown strength in 2017 and have supported growth as well. The pace of housing starts have been a pleasant surprise and our province’s retail sales numbers show that consumers have faith in the economy.

While growth is returning, it may not feel that way for many Albertans as we continue to struggle with an unemployment rate of nearly eight per cent. Employers will likely remain hesitant to hire which will keep the unemployment rate above seven per cent into 2018.

ATB Financial’s economics team is forecasting real GDP growth of 3.9 per cent in 2017, to be followed by growth of 2.7 and 2.2 per cent in 2018 and 2019, respectively.

Read the complete Alberta Economic Outlook and watch ATB's Chief Economist Todd Hirsch provide a summary of the report.

Alberta real GDP growth, graph​​

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