Alberta's economy is 'continuing to weather the storm': ATB

A new report from ATB Financial suggests Alberta’s economy is pushing through inflation and interest rate headwinds.

ATB's latest economic outlook, released on Wednesday, notes Alberta leads all provinces in population growth and is outpacing the national economy on job creation.

"We see Alberta continuing to weather the storm caused by high inflation and rising interest rates," said Mark Parsons, chief economist with ATB Financial. 

ATB is predicting that Alberta's real GDP will grow by 2.3 per cent this year, a mild slowdown from 2023’s estimated pace of 2.5 per cent. It is forecast to pick up to 2.7 per cent in 2025.

"The reason we’re seeing Alberta outpace the rest of the country is population growth," said Parsons.

"We're getting people from the rest of the country, that's adding to consumer activity, to housing."

As of October 1, 2023, Alberta’s population was 4,756,408, according to provincial estimates.

"In the 12 months preceding October 1, the province's population expanded by about 194,000 people, or 4.3 per cent," says online population data from the provincial government.

"This represents a significant increase from the previous year (2.5 per cent in 2021-22) and the highest October 1 annual growth rate since 1980."

ATB believes the main reason residents are moving to Alberta is due to housing that is more affordable than what is found in B.C. and Ontario. 

"The population is expected to expand by more than 100,000 a year over the next two years, reaching five million by mid-decade," reads the report. 

ATB predicts a 3.4 percent growth in population for Alberta in 2024. 

"Our forecasts, we don't have much growth in consumer spending," said Parsons. 

"And that's what one of the weaknesses we see in the outlook for this year."

While Parsons believes Albertans will steer clear of big ticket items, he thinks they'll continue to spend money at restaurants and on travel. 

REPORT GOOD FOR NEW BUSINESS

Newly-hired staff at the soon to be open The Office Restaurant & Bar on Stephen Ave are busy perfecting the Cabo-and-Cali inspired menu.

Owner and operator Jeff Hanna says he’s excited to swing open the doors of the newest eatery.

“It's just nice to see the crowds because we were missing them for so long,” he said.

“I used to have this space, I built it from a bank into a restaurant way back in the day and then sold it, and come full circle, and here we are again.”

Hanna says the name was inspired by many conversations during the pandemic.

“During COVID, when everyone's saying ‘oh geez, downtown's never gonna be back to where it used to be and no one's ever gonna go back to the office, everyone's gonna be working from home,’ I just kept saying, what a great opportunity to have a place anyways, downtown Calgary, to call a place the office,” said Hanna.

Hanna is expecting to open to the public in the beginning of April.

ATB says 2024 is not the year for the consumer.

 

"The bad news is, if people are going out renewing the mortgage, they're going to be entering into a much higher rate than they had when rates were at rock bottom," he said. 

We do think that many people will continue to pull back on more discretionary items, durable goods, for example. We just don't see a lot of growth in that area."

A stabilization within the energy sector is also set to help Alberta plow ahead with the Trans Mountain pipeline expansion coming online this spring, and expanding production. 

"(The Trans Mountain expansion) is providing much-needed market access to producers, Coastal GasLink on the natural gas side for next year," said Parsons. 

"So this has been a much welcomed development for the industry."

The full report can be read online at ATB Financial's website.