Calgary — This has been a challenging year for Alberta, with oil prices slumping and the economy slowing as a result. Now many of us are feeling the effects. Today, ATB Financial is releasing its latest Alberta Economic Outlook, where its findings provide a glimpse into what may happen over the next three months (July-September 2015).
Capturing five primary economic indicators, the key results from ATB’s Alberta Economic Outlook include:
- Alberta’s economy will remain slow in 2015 with real GDP growth of about 0.4 per cent.
- While adding 38,000 net jobs over the last twelve months, the Alberta’s labour market has weakened with losses in oil and gas and professional positions.
- Weak oil and natural gas prices have curtailed investment in the energy sector.
- Housing starts remain stable, but softness in residential real estate suggests that construction activity will remain lukewarm.
- Net interprovincial migration picked up modestly in Q1, but 2015 will remain lower compared to previous years.
“The price of West Texas Intermediate recovered somewhat in the last quarter to around $US 60 per barrel. But it remains volatile and has now slipped below $55 because of global instability,” said Todd Hirsch, Chief Economist at ATB Financial. “The worst of the downturn is likely behind us. We are close to the turning point where things could start to gradually improve.”
While the future is unpredictable, the Alberta Economic Outlook aims to give a view of what the next few months is likely to hold. The report ends by outlining three different scenarios, each with a brief summary on what investment and the unemployment rate looks like and other potential outcomes.
“Oil prices are still unstable and could change in the third quarter. However, our research suggests that scenario number two in our Alberta Economic Outlook is the most likely. This scenario puts the average oil price between $US 50-60 per barrel and is consistent with the projection in our Q2 economic update,” said Hirsch.
The Alberta Economic Outlook also provides insight on a number of other sectors in our province, including retail and housing. And like the first two quarters of 2015, agriculture, forestry and tourism are continuing to face a good year due to lower fuel prices. The lower Canadian dollar will also help commodity exporters and tourism operators.
“We know there are many Albertans who are hurting right now. It’s a tough time,” said Hirsch.
“But let’s not panic. We’ve faced energy price shocks before and this is an entirely normal pattern for us to be going through.”