Province showing strongest growth in Canada this year
Several economic forecasts point in the same direction: Alberta has turned the corner.
Even though they remain in contrast to previous years when the Alberta economy expanded by four to five per cent annually, there is still a sense of optimism in the province.
Recent surveys by ATB Financial, who predicts a 2.2 per cent provincial growth this year, indicated owners and operators of Alberta enterprises are feeling more optimistic about the economy, and their business future these days.
“It’s definitely more upbeat. As I travel around the province and talk to industry associations and individual business operators, they’re almost consistently saying the worst is behind us, and we’re starting to see some modest improvement,” said Todd Hirsch, chief economist with ATB Financial.
Hirsch points to the stabilization of the petroleum industry as the biggest factor in the recovery of the economy.
“The downturn we saw in 2015 and 2016 was due entirely to the drop in oil price, the big pullback we saw in oil and gas investment, and everything else,” said Hirsch. “Now in 2017, we’ve seen the petroleum industry stabilize. That alone would give us zero growth or maybe very modest growth, but layered on top of that are other sectors that are doing well: the tourism sector, the agriculture sector, and the agri-foods sector.”
In his Provincial Outlook report, Robert Hogue, senior economist with RBC, says Alberta is seeing light at the end of a long and dark tunnel.
“We expect the economic turnaround to be gradual and uneven, which would be a departure from Alberta’s typical ‘boom-bust’ pattern exhibited in past economic cycles,” said Hogue.
He projects positive growth to return in 2017 at a rate of 2.1 per cent, reflecting an expected increase in energy-sector spending in the province. Such a rate of growth, he notes, would only partially reverse the cumulative 6.5 per cent contraction that occurred in the previous two years.
“We expect the recovery to continue and, in fact, accelerate in 2018,” he said.
The Conference Board of Canada also predicts growth for Alberta at a rate of 2.8 per cent, and says the province is poised to have the strongest economic growth in 2017, due to fast-rising oil production.
“Following two tough years stemming from widespread weakness in the energy sector, Alberta’s economy finds itself with the strongest economic growth this year,” said Marie-Christine Bernard, associate director, Provincial Forecast at The Conference Board of Canada. “Along with a big increase in oil production, some of the growth in Alberta will come from the rebuilding efforts in Fort McMurray.”