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Alberta to keep on rolling if a future recession is around the corner: report


A new financial outlook nationally and for each province conducted by Desjardins Group shows that Alberta’s economy will stay positive even if a national economic downturn looms.

Predicting a national recession later this year, the Desjardins group said Alberta’s combination of a strong energy sector, population boom and relatively low housing costs, compared to the rest of Canada, will keep the province thriving.

“In our view, Alberta faces some of the best near-term economic prospects of any of the provinces in Canada, even as the Canadian economy begins to slow towards the end of 2023,” said Desjardins Group principal economist Marc Desormeaux.

In June, Canada’s inflation rate came in at 2.8 percent, in line with the Bank of Canada’s targets.

In June, Canada’s inflation rate fell to 2.8 percent, in line with the Bank of Canada’s targets.

But economists say wages are not keeping pace, and house prices are high.

The Desjardins Group is forecasting a 2.9 percent real GDP growth in 2023 for Alberta and one percent for 2024.

“About 69 per cent of businesses in Calgary are actually quite optimistic about what's ahead,” said Calgary Chamber of Commerce CEO Deborah Yedlin.

“And certainly what you just talked about, is it's buoyed by the fact that the energy sector continues to underpin our economy.”

West Texas Intermediate crude is hovering near US $80 per barrel, which is reaping revenue for local energy producers.

“When we think about the western Canadian base, and frankly, this level of pricing is quite sustainable for the sector,” said chief analyst Kevin Birn, with Canadian Oil Markets.

“It's high enough to generate sufficient cash flow to meet investor expectations, which has been become a primary driver of those companies.”

Birn added that worldwide demand is increasing including in the United States.

“What's going on is the result of the physical market cap of catching up, and the reality is we are seeing demand come up and it's tightening the market,” said Birn.

“But when we think about the oil generally, we see it sitting somewhere in the band of $79 - and moving around based on the market fundamentals and sensitivity in the market.”

Calgary-based Tamarack Valley Energy will release second quarter results on Thursday with its president and CEO saying the company remains optimistic.

“I think we feel much better about the second half than we did the first half of this year,” said Brian Schmidt.

“Air travel is picking up, summer driving is picking up. So you're seeing a lot on the demand side. A few surprises on demand. On supply, we are seeing continual drawdown on some storage.”

Desormeaux adds that an influx of people moving to Alberta is also contributing to a growing economy.

“The net outflow from Ontario to other provinces from the four quarters (last year) to Q1 is 55,000 people, the most ever,” he said.

“And Alberta was receiving more than half of that over that time period. All of these factors contribute to the strength of the Alberta economy.” Top Stories

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