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Growth continues, trade uncertainty persists

Growth continues, trade uncertainty persists

Posted on: 8/24/2018 | Author: ATB Financial's Economics + Research Team

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ATB Financial’s latest Alberta Economic Outlook ​suggests the province’s economy will continue to grow. The report, released today, takes a deep dive into our research on the economy and provides helpful insight and analysis for Albertans.

Key findings in the report show several economic indicators are climbing higher. Retail, wholesale and manufacturing sales are all up over last year and employment is growing slowly—full-time jobs have yet to surpass the peak reached in January 2015. Interprovincial migration has also returned to positive, though still remains well below pre-recession levels. Agriculture and agrifoods, tourism, transportation and logistics, and the tech sector are building momentum, as well.

Rising demand for oil has kept the benchmark WTI price above $60 a barrel in 2018, however the gap between that and the price Alberta receives for its heavy crude has widened. So, despite relative stability in oil prices, the Outlook shows Alberta is struggling to feel the benefit.

Today’s Outlook shows pipeline transportation remains a concern, as do the risks associated with deteriorating trade relations with the US. Since the last Alberta Economic Outlook in May, the only change to ATB’s analysis comes with respect to a considerable deterioration in global trade relations.

"Not only is NAFTA in danger, but U.S. trade relations with China, Mexico, the E.U. and Turkey have worsened significantly,” says ATB's Chief Economist Todd Hirsch. “At this time, there is little clarity as to how bad conditions will get. If trade tensions worsen, a global slowdown is almost inevitable.”

The troubling trade situation has likely caused some Canadian and Alberta companies to take a wait-and-see approach. As a result, ATB has lowered its growth forecast by a tenth of a percentage point and is forecasting real GDP growth of 2.6 per cent this year, and 2.2 per cent in 2019.

Read the complete ATB Alberta Economic Outlook (August 2018)

ATB Economic Outlook, Alberta, Aug'18, graph​​​​​​

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