We know that it’s been a challenging year for our economy. The Canadian and global economies remain out of balance, which has weighed down confidence and commodity markets. And here in Alberta, economic stability was lost with a severe slump in oil prices—that’s had a painful impact on employment for thousands in our province.
ATB’s Chief Economist Todd Hirsch is often asked if there is a light at the end of the tunnel.
“The short answer is: yes, but bringing our economy back into balance is dependent on four factors taking place,” says Hirsch. Those four factors are:
- Some increase in oil price—not necessarily back to $107/barrel, but it will have to get back to about $60/barrel.
- Alberta wages, bonuses and salaries (and other costs for businesses) brought more in line with the Canadian average.
- Strong performance in other sectors like tourism, manufacturing and agriculture.
- The Canadian dollar needs to remain weak for a while longer.
When will we start to see some economic recovery?
“We’re likely to see growth return in 2016, but it will be modest—probably below the average for other provinces. Depending on when oil prices return (and the other factors contributing) prospects for 2017 are better, but it could still feel quite sluggish for those more accustomed to a white-hot economy.”
Keep an eye on atb.com/economics for Todd’s next economic outlook coming this October.