ATB projects positive growth for province in latest economic outlook
ATB Financial released its full economic outlook for the province on Thursday morning and Chief Economist Todd Hirsch says growth has returned to the province.
A lot has changed since the financial institution gave its last update in November of 2017 and Hirsch is projecting positive GDP growth of 2.8 percent this year.
“It’s better than the two years of recession we saw in 2015 and 2016 but it is a moderate rate of growth and it’s roughly half the rate of growth that we were experiencing prior to the downturn back in 2013 and 2014,” he said.
Hirsch says growth has returned to the province but that it is a bit slow so it could be a challenge for job-seekers.
“The unemployment rate is expected to come down but only, kind of, gradually, so a good year of growth but still feeling some sluggishness and some challenges that are lingering,” he said.
U.S. oil prices have strengthened but the price for Alberta’s crude has not seen the same increase.
“The oil price, that West Texas Intermediate price, that’s the U.S. benchmark price that we hear quoted all the time, the encouraging part is that price is back around $60 a barrel, that’s a pretty decent price, the problem for western Canada though is that the western Canadian price, the heavy oil price, has not seen the same lift and as a result that gap between the two, the differential, that’s widened out again. Producers in Alberta are not seeing the better prices, largely because of pipeline capacity, difficult to move the product out of the province, as a result it’s still, kind of, a challenging environment for Alberta oil producers, they’re not seeing lift in price,” Hirsh said
ATB says non-energy industries, like agriculture, tourism and technology, are expected to perform well this year.
It is anticipated that housing prices will improve in 2018 but the report suggests that housing starts will remain the same or decrease slightly.
“We’re expecting 2018 to be okay for the housing market, here in Calgary and in Alberta, probably some modest price increases as some optimism comes back and confidence comes back. However, pulling against that is changes in the mortgage lending. That is going to restrict some buyers from getting into the market or it’s going to force them to look at lower priced properties,” he said. “Housing starts, on the other hand, they’ll probably be flat or maybe slightly down from where we were last year, and that’s only because last year actually was a surprisingly good year for housing starts for Alberta.”
To read the full report click HERE or scroll the document below.