Gerd Altmann photo
Calgary—ATB Financial’s newest Alberta Economic Outlook shows Alberta is on track to recover some of the lost ground from the global pandemic and oil price crash. ATB is forecasting our province’s real GDP will grow by about 4.1% this year, followed by 2.6% growth in 2022.
At this rate, Alberta’s economy will surpass where it was before the global pandemic by 2023. This forecast is based on the assumption that Canada will be through the worst of the pandemic by the fall and that global demand for oil will continue to grow with OPEC limits on supply.
“Alberta’s economic recovery is not going to look the same for everyone across different sectors and income earners,” said Todd Hirsch, vice president and chief economist for ATB Financial. “It’s unclear how many jobs lost during the pandemic will return. Although we are forecasting employment growth of almost 4%, we anticipate Alberta’s jobless rate will remain relatively high throughout this year, hovering around 10%.”
ATB is forecasting a K-shaped recovery—higher-income earners who didn’t lose their jobs on the upper branch will return to normal and drive consumer spending. At the same time, low-income earners on the lower branch may face chronic unemployment because they don’t have jobs to go back to and emergency government relief programs are winding down.
Capital spending in the oil and gas sector will still be down compared to 2019—which was already a slow year—however, 2021 is looking better for Alberta’s oil patch. Production bounced back to pre-pandemic levels in November and prices have also improved significantly with ATB forecasting an average of US$51 a barrel for 2021.
“As Alberta’s economy recovers, there are a number of bright spots to watch including our growing tech sector which has attracted investment from several big companies,” Hirsch said. “Our province’s agriculture and agri-food sector also continues to perform well with the cattle industry rebounding quickly from pandemic-related challenges. There are a lot of reasons to be optimistic about Alberta’s economy in the long run.”
Read the complete ATB Financial Economic Outlook.