Alberta’s economy is showing signs of gradual improvement and stability, according to ATB Financial’s latest economic outlook.
ATB Financial points to several economic indicators in its quarterly outlook: retail activity, housing prices and the labour market are all showing modest growth. The rebuild in Fort McMurray will also add to growth in the province.
ATB Financial’s economics and research team is forecasting Alberta’s economy to expand by 2.7 per cent this year and 2.3 per cent in 2018. ATB’s chief economist Todd Hirsch expects Calgary to rebound a bit more than Edmonton.
“Calgary will probably do a little bit better, only because it was hit harder during the downturn. So, in terms of the unemployment rate in Calgary – rising above 10 per cent last summer – we think Calgary will actually do a bit better, simply because it has lost more ground and it has more ground to gain on Edmonton.”
The strongest sector this year is expected to be tourism.
“It’s much smaller, of course, than the energy sector,” Hirsch said. “But tourism – with that Canadian dollar around 72 to 73 cents, with the U.S. economy firing on all cylinders, more Canadians staying closer to home – I think tourism will be a leading sector in 2017 for Calgary and for Alberta.”
However, the financial institution notes there are still challenges ahead, citing unpredictability in the White House as one factor.
“U.S. President Donald Trump is now targeting Canada with regard to trade. Depending on the actions taken, some Alberta sectors – including forestry and energy – could feel the pain,” read a media release from ATB Financial.
Oil prices are another factor when it comes to Alberta’s economy. Oil prices have dipped below the $50USD per barrel mark, which has lowered the bank’s expectations for the average crude price this year.
Given the sensitivity of Alberta’s economy to oil prices, ATB said any dollar lost on oil prices acts to slow the pace of recovery. Still, there is optimism.
“The energy patch has stabilized, and that alone has gone a long way to boost sentiment and optimism in the province,” Hirsch said. “While prices in April and May dipped back under the $50USD per barrel mark to the $46USD to $48USD range, lower average prices for the year are not expected to push the province back into a recession, though they could slow the pace of recovery.”
The entire economic outlook report has been posted below.