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ATB’s Alberta Economic Outlook: Latest growth forecast for Alberta cut in half

ATB’s Alberta Economic Outlook: Latest growth forecast for Alberta cut in half

Posted on: 5/16/2019 | Author: ATB Financial's Economics + Research Team

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Five months into 2019, the Alberta economy is facing a tough year. Real GDP is forecast to grow, but the growth is expected to be modest at just 0.7 per cent, down from an already modest forecast of 1.4 per cent in March.

This is the latest economic forecast shared in ATB’s Alberta Economic Outlook.

The challenges facing Alberta this year include a national economy that is off to a sluggish start, a trade war between the world’s two largest economies, high levels of personal debt and a fair bit of slack in the labour market left over from the recession. It all adds up to significant headwinds blowing against the Alberta economy.

Pipeline capacity continues to be the primary contributor to the slower growth. A few years ago, the focus was on getting a new oil pipeline to tidewater so we could access other markets and get a better price for our product. Today, production is outstripping the actual capacity of the pipeline system. Crude-by-rail has helped, but until new pipeline capacity comes online, investment in the oil and gas sector will be dampened, with slower economic growth the result.

Oil and gas is not the only game in town, but it is a huge part of our economy and the ripple effects of lower investment are felt in sectors from retail trade to construction to professional services.

On a brighter note, agriculture, manufacturing, tourism and digital services will likely perform well this year. But, barring something unforeseen, the overall forecast remains gloomy.

 

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