Industry Growth Overshadowed by Unemployment Rate Heading into 2018
According to the latest indicators and reports, Alberta’s economy is finally reversing its downward slide that it’s been on over the past few years.
The province’s agriculture, oil and gas, food processing, manufacturing and retail industries are all experiencing growth, however, the challenge of unemployment in Alberta still remains a significant hurdle heading into the new year.
As of October 2017, the provincial employment rate is sitting at 7.8 percent, just a year after it hit a record high of 9 percent in November 2016 (Alberta.ca, Economic Dashboard).
ATB’s Economic Outlook Highlights
ATB Financial’s latest Alberta Economic Outlook highlights some key findings indicating growth in industries but a slow recovery back to low unemployment rates:
- Alberta’s energy sector is predicted to grow by the end of this year
- Retail and housing sector performance have both increased
- Agriculture, agri-food and tourism will continue to show steady growth into 2018
- Alberta emerged from two years of recession with 4 percent real GDP growth, likely to be the best in Canada
- Oil prices are steadying, slowly creeping higher (currently at about $US 55 per barrel)
- Net-migration to other provinces will likely slow down but continue in 2018
- High unemployment rate to continue throughout 2017 and into 2018
A Stabilizing Energy Sector
The four percent real GDP growth mentioned above is largely attributed to the resurgence of Alberta’s oil and gas sector and the resilience shown by both the housing sector and retail sector.
Although still low, the price per barrel is doing okay and seems to be stabilizing which has given some companies to begin new business investments, especially in conventional drilling.These new investments have been critical in turning Alberta’s economy around in 2017.
Meanwhile, housing and retail have both shown strong numbers in 2017 while also experiencing modest growth. The amount of new housing starts happening province-wide have surpassed expectations while retail sales have shown that consumers continue to carry some faith that the economy will eventually make a U-turn.
Still a Waiting Game
Despite the good news, Albertans may not feel like there’s a ton of jobs out there just yet. Employers will likely continue to be hesitant to hire on new staff for a while until the full effect of new provincial and federal legislation – like the proposed tax changes and increase to carbon taxes – are better understood.
Forecasted GDP growth by ATB Financial:
- 2017 – 3.9 percent
- 2018 – 2.7 percent
- 2019 – 2.2 percent
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