ATB Financial’s Economic Outlook Sheds Light on Future for Alberta
According to ATB Financial’s Alberta Economic Outlook for August 2018, the western Canadian province’s economy is expected to slowly recover and experience slight grow over the next couple years.
Some important findings of the report include the fact that both manufacturing, wholesale and retail sales are all up compared to 2017 which will help sustain this growth through to 2019.
At the same time, it finds that the transportation, agriculture, agrifoods, logistics and tech sectors have also been doing their part to keep the fire hot under Alberta’s economic pot of recovery.
A Struggling Energy Sector…
Despite all the positivity, however, there are some integral parts of Alberta’s economy that haven’t been performing as well. Unemployment rates sit high and there are many questions that remain about the quality of new jobs and the amount of pay they offer, especially in the oil and gas sector.
Furthermore, struggles with new pipeline construction, continued discounts on sold oil and soured trade trelations with the United States are weighing heavily on Alberta’s economic recovery and will continue to do so as it experiences a modest real GDP growth in 2018 and 2019.
Alberta Real GDP, A Decade of Change – 2010 to 2020
- 2010 – +5.1%
- 2011 – +6.7%
- 2012 – +4.0%
- 2013 – +5.8%
- 2014 – +5.9%
- 2015 – -3.9%
- 2016 – -3.6%
- 2017 – +4.9%
- 2018 – +2.6%
- 2019 – +2.2%
- 2020 – +2.1%
Challenges Ahead for Alberta
ATB Financial has lowered its expectation for growth in Alberta by 1 percent since its May 2019 outlook as a result with difficulties in international trade relations. To finish this year and the next, the bank has predicted a growth of 2.6 percent by the end of the year and a mediocre 2.2 percent in 2019.
While the North American Free Trade Agreement (NAFTA) has been jeopardized, America’s trade relations with the EU, Turkey, Mexico and China have become significantly worse. Because economic predications are not based on speculation, the full effect of this challenging scenario for Canada is still yet to be realized.
Still, this has made many companies doing business in Canada and Alberta take a second look at things. Many are now taking on a wait-and-see approach to things such as pipeline approvals and trade disputes like that of NAFTA mentioned above.
We can only hope that things will get better for Alberta in the coming years as new legislation has been deemed to make it next to impossible to get any pipelines built in a province which reacts heavily to the success of its energy industry.
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