The economic challenges continue to weigh on Alberta with a bit of a step back in growth and job creation, according to two new reports.
ATB Financial’s newest Alberta Economic Outlook forecasts 0.8 per cent real GDP growth for the province in 2019.
Chief economist Todd Hirsch said after a bit of an improvement in 2017, things have definitely flattened out.
“It has been a little bit of a surprise,” Hirsch said Tuesday, “but not entirely when you think about what’s driving it.”
Alberta’s economy is facing challenges from all sides, he said, but mostly the stagnant growth is due to the sluggish oil and gas sector and the lack of pipeline capacity — things that are dampening construction activity, consumer spending and job creation.
Calgary is being hit harder than many other cities, he said.
“Because we are the epicentre of Alberta’s oil and gas industry — and especially a lot of those high quality, high paying oil and gas jobs — we are feeling it worse in Calgary than a lot of other parts of the province,” Hirsch said.
He also pointed out that Calgary’s diversification into other industries isn’t as far along as other cities, which also has led to slower job growth.
Another survey backs up ATB’s forecast of a stagnant hiring climate.
The latest ManpowerGroup Employment Outlook Survey revealed that 10 per cent of Calgary-area employers plan to hire in the fourth quarter of 2019, while eight per cent plan to cut back.
The remaining 82 per cent of employers plan to maintain their current staffing levels in the upcoming quarter.
“I think it’s also important to note we’re not expecting to slide back into recession,” Hirsch said. “We’re not expecting things to be nearly as difficult as they were in 2015 and 2016.”
He added that the economy contracted about seven per cent in those two years.
ATB is forecasting growth of two per cent in 2020, assuming some of the transportation issues clogging up the oil patch are resolved and investment in new production increases.
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