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Changes to 2016 GDP figure still show significant decline

Changes to 2016 GDP figure still show significant decline

Posted on: 11/8/2017 | Author: ATB Financial's Economics + Research Team

Every November, Statistics Canada revises its GDP numbers for the previous year. The latest report from the agency shows there was little change to its earlier calculations.

Back in May, Statistics Canada had Alberta’s economy shrinking in 2016 by 3.8 per cent. The most recent calculations show a change of 0.1 per cent. That means that Alberta's economy shrunk 3.7 per cent for the second consecutive year in 2016. The last time the province’s economy contracted two years in a row was in 1982 and 1983.

The nation’s statistical agency noted that the economic decline was led by lower business gross fixed capital formation (-17.5 per cent). Particularly low oil prices discouraged investment in the oil and gas sector. Of course, cuts to spending and the lack of investment rippled throughout the province’s economy, with thousands of Albertans losing their jobs. Many sectors like manufacturing, retail and construction were affected which weighed on Alberta as well.

The good news is that the provincial economy is set to get better this year. In ATB’s last Economic Outlook, we projected real GDP to land above three per cent. Our next Economic Outlook is scheduled to be released in the next couple of weeks, so keep an eye on The Owl to see the revised numbers for 2017 and beyond.

Real GDP, graph

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