Tough Times Will Continue for Many Albertans: ATB Economic Outlook

Calgary — While there are signs of improvement, the second half of 2016 will continue to be difficult for Albertans and businesses in our province. Today, ATB Financial is releasing its latest quarterly Economic Outlook for the province, providing insight into what may happen in the months ahead.

Capturing five primary economic indicators, the key results from ATB’s Alberta Economic Outlook are:

  • Alberta’s economy is set to contract 1.9 per cent this year, following a four per cent contraction in 2015.
  • The Fort McMurray fires will weigh on the province’s economy this year, while rebuilding will add to GDP in 2017.
  • Alberta’s energy sector and related industries will continue to shed labour throughout the summer, pushing the unemployment rate above eight per cent.
  • Weak economic conditions will continue to affect the retail and housing markets with modest improvements expected next year.
  • A net outflow of interprovincial migrants over the next few quarters is expected, although Alberta’s population will continue to increase.

“Here in Alberta we’ll see our already struggling labour market face more energy sector layoffs,” said Todd Hirsch, ATB’s chief economist. “At the same time, unanswered questions around the Brexit vote and the heightened volatility in global financial markets are not helping the situation.”

However, there are signs of better days ahead.

“We’ve seen oil prices stabilize and they may improve to the range of $US 55-60 by the end of the year. This would bring some stability to Alberta’s oil patch and labour market. And, barring more turmoil in Europe, global financial markets should start to calm down and ease fears of an economic crisis” said Hirsch.

In the meantime, Alberta’s retail, manufacturing, housing and construction sectors will continue to be challenged.

ATB is forecasting a modest recovery of 2.0 per cent real GDP growth in 2017.

Find the complete Alberta Economic Outlook (Q3, 2016) here.