A report released by ATB Financial Wednesday predicts a modest improvement in Alberta’s economy in 2017.
The ATB Alberta Economic Outlook suggested several factors in particular — higher oil prices, the approval of two pipeline projects and U.S. President Donald Trump’s executive order to expedite the Keystone XL pipeline — have created optimism in the energy sector.
Still, the recovery is expected to be slow, with GDP growing by 2.2 per cent this year, due mostly to oil price improvements.
“The petroleum sector has stabilized and is entering 2017 in reasonably good shape,” said Todd Hirsch, ATB’s chief economist.
“Oil prices are forecast to remain in the range of US$50 – US$60 for the WTI benchmark price. But growth in energy sector investment is expected to be soft,” Hirsch said.
The report predicts delayed job growth and high employment until the second half of 2017. That will keep Alberta’s unemployment rate close to eight or nine per cent until later in the year when a gradual improvement is expected.
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Growth areas in the province include agriculture, agri-food and tourism. Wheat and canola receipts should be stable, and tourism could see another record-setting year thanks to the relatively weak Canadian dollar, an influx of visitors from Asia and Canada’s 150th celebrations.
Construction spending will slow, especially for commercial projects.
ATB predicts positive population growth despite net inter-provincial out-migration.
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“The projected growth in our GDP represents an end to the 2015-16 recession — but it ushers in an era of modest growth,” Hirsch said. “It will stand in contrast to the high-growth period of 2010-14 when the economy expanded by four to five per cent annually.”
The report predicts GDP growth of 2.3 per cent in 2018.