Alberta entered 2018 in much better shape than a year ago, when the economy was crawling out from under the 2015-16 contraction, says a new report released on Thursday by ATB Financial.
“With growth returning, it is time for Albertans to shift away from a mentality of recession, to one oriented toward expansion,” the report said. “Still, challenges exist. North American benchmark oil prices have increased, yet Western Canadian prices have barely budged due to pipeline capacity constraints to U.S. markets.
“NAFTA negotiations and ongoing opposition to the Trans Mountain Pipeline expansion are creating uncertainty. Household debt levels are high, and interest rates are likely to rise.
“On balance, however, Alberta’s economy continues to edge forward. ATB Financial’s Economics and Research team is forecasting real GDP growth this year of 2.8 per cent, followed by 2.2 per cent in 2019.”
Further growth of 2.0 per cent is expected in 2020.
The report said the province’s unemployment rate will fall from 7.9 per cent in 2017 to 6.8 per cent this year, 6.4 per cent in 2019 and 6.1 per cent in 2020.
The employment rate in Alberta will rise by one per cent this year, two per cent in 2019 and 1.7 per cent in 2020, it predicts.
“There are threats beyond our control that add uncertainty to our economy including NAFTA negotiations and the opposition to pipeline expansion,” said ATB Financial’s chief economist Todd Hirsch. “Household debt levels are also at record levels, and borrowing costs are rising. As well, the global economy may be shifting into another period of financial and market volatility.
“We saw growth return to the province last year and almost every economic indicator points to July of 2016 as the pit of the recession. That was 19 months ago. It is time for Albertans to reorient our language and thinking away from the recession and focus on growth.”
The full ATB report can be found at https://goo.gl/vzXAti
Respected business writer Mario Toneguzzi is a veteran Calgary-based journalist who worked for 35 years for the Calgary Herald in various capacities, including 12 years as a senior business writer.
The views, opinions and positions expressed by columnists and contributors are the author’s alone. They do not inherently or expressly reflect the views, opinions and/or positions of our publication.