Ramped up production in the oil sector has helped Alberta surge ahead in economic growth this year, according to a report from the Conference Board of Canada (CBOC).
The report suggests Alberta is “outpacing other provinces” this year with real GDP growth of 6.7 per cent. But, the board said Wednesday that pace of growth isn’t expected to last.
It is forecasting the economy to grow by 2.1 per cent in 2018.
LISTEN: Conference Board of Canada forecasts 2.1 per cent growth in Alberta for 2018
“We have to remember in May and June of 2016, in Fort McMurray with the fires, oil production was disrupted and when it came back up, it came up towards the end of 2016. So that also fueled growth in 2017,” associate director of provincial forecast Marie-Christine Bernard said.
Bernard said several sectors emerged from recession in 2017, but it was drilling and solid oil production that led growth.
“There are some large oilsands investment projects that are close to completion, or have been completed, and that’s also adding to oil production,” Bernard explained.
Bernard said consumer demand was also very strong and that housing starts increased.
“The housing market was very depressed during the recession,” she said.
Bernard said a stronger housing market is an important economic indicator because “when more people have income that’s when they might be able to jump into the housing market.”
WATCH BELOW $5.3B injected into Alberta economy for Fort McMurray wildfire rebuild
She said several provinces saw growth in their housing markets but that overall the market is expected to cool in 2018, especially in Ontario where measures were put in place to combat rapidly rising prices.
Bernard said the board is also forecasting more interest rate increases in 2018, which will cool consumer demand.