Conference board predicts recession to continue in Calgary and Edmonton
Published Thursday, March 3, 2016 12:12PM MST
Last Updated Thursday, March 3, 2016 7:06PM MST
A new report is predicting another tough year for residents in Calgary and Edmonton, with another recession expected to loom over 2016.
The Conference Board of Canada says that local recessions are expected for Calgary and Edmonton, with a drop of 1.2 and 1.3 percent respectively.
In 2015, Calgary's economy dropped by 2.4 percent, while Edmonton's contracting by 1.8 percent.
While low oil prices are chiefly to blame for the situation, experts say the impact will soon be felt across many other business sectors.
The layoffs in the oil sector are leading to a domino effect, with many people leaving the city for work. That's affecting the real estate market, and then the construction industry in turn.
The service sector will also be suffering too as many residents will begin to see their disposable income disappear.
The two cities' employment rates will also suffer hits, with Calgary's rate dropping by 2.1 percent, pushing the unemployment rate to 7.5 percent, passing the national average for the first time since 1987.
Edmonton's employment will drop 0.4 percent, pushing unemployment to seven percent, the highest since 1997.
The Conference Board's report does have good news, though, but it's just not here. The rest of the country is faring much better in terms of the economy, with Vancouver, B.C. leading the country in growth at 3.3 percent.
The board also says that oil prices won't likely return to where they were for quite some time, if at all. However, one thing to take from the report is that there is still a market for Alberta's oil.
"Think about China, think about Japan, think about India - these are all countries that are big importers of energy that are going to benefit from this big decline and that should help, we feel, over the next couple of years, to ramp up that global picture and global demand and hopefully, business confidence and confidence in equity markets around the world," said Pedro Antunes with the board.
The Maritimes and Ontario are seeing a boost because of their manufacturing sectors and the low dollar is also boosting tourism in many parts of the area.