Alberta's economy continues to suffer from low energy prices, and the situation will not improve anytime soon.
ATB Financial released its quarterly economic outlook on Jan. 14, and it predicts that the next six months will be "the roughest yet" for Alberta. The report notes that the province's economy is closely tied to the price of energy resources and shrunk by 1% last year. It forecasts a further contraction of 0.5% in 2016, although it suggests there may be some modest growth towards the end of the year.
The petroleum sector and related industries will continue to shed jobs, the provincial unemployment rate will rise above 7%, and demand in both the residential housing and retail sectors will remain weak. Interprovincial migration will also decline, and the province could even see a net outflow during one or more quarters this year.
"As we move into 2016, excess global supply from OPEC producers coupled with uncertainty in China, Europe and the Middle East will continue to weigh on oil prices. This will lead to even greater stress on the balance sheets of the province's energy producers as they struggle to reduce costs," explains ATB's chief economist Todd Hirsch. "Our labour market will remain challenged, including the loss of some labour to other provinces. But hiring in other sectors will help to offset job losses, though in some cases these will be lower-paying jobs," said Hirsch.