Alberta has overcome its recession, although it will likely take a few more years before it sees a stronger economy again, says ATB Financial in its latest Alberta Economic Outlook. The province has seen improvements in oil and gas, agriculture, food processing, tourism, retail and manufacturing.
The Outlook report says Alberta saw three per cent real GDP growth. The retail and housing sector saw better performance, but oil prices have dropped. In addition, though tourism, agriculture and agri-food will lead growth, the oil sector remains the key driver of Alberta’s economy. The Outlook also found migration towards other provinces should slow down later this year. However, trade talk with the United States poses a risk for the province.
Energy sector continues to struggle
"The energy sector continues to be challenged by oil prices hovering below $US 50 per barrel," says Todd Hirsch, ATB Financial's chief economist. "At those levels, Alberta's energy sector struggles. Drilling activity and hiring has picked up modestly, but growth in the sector remains tenuous and not likely to snap back to pre-recession levels anytime soon."
The labour market has seen an increase of 35 000 new jobs over the last year. However, jobs are lower paying and opportunities in the private sector are lacking.
More diversified economy
"Alberta's economy is recovering, but it is not returning to what it looked like in 2014," says Hirsch. "Instead, the economy is evolving into one that is more diversified, and more typical of other Canadian provinces. It is a slow process and it may be a few more years before we see a full economic recovery."
ATB Financial expects real GDP growth of 3.2 per cent this year, and 2.1 per cent in 2018. To learn more, read the full report here.