Alberta Economic Outlook 2018

All signs point to growth for Alberta’s economy in 2018 with non-energy sectors poised to perform well, particularly agriculture, agri-foods, tourism and technology. Still, challenges continue, with the unemployment rate stubbornly high and some businesses in the province struggling.

Late last month ATB Financial released its first  Alberta Economic Outlook of 2018, providing insight into what has happened so far this year and what may happen in the months ahead. The key findings are:

  • US oil prices have been stronger this year.
  • The price for Alberta’s heavy crude has not enjoyed the same increase, which has widened the differential.
  • Alberta will continue to see job creation in 2018, but the unemployment rate will come down only gradually.
  • Housing prices will improve modestly over last year; housing starts will be unchanged or slightly lower.
  • Net inter-provincial migration should return to positive in 2018.

When it comes to oil, North American benchmark oil prices have increased, yet Western Canadian prices have barely budged, and our heavy oil producers have not enjoyed the same lift in price. This is due mostly to pipeline bottlenecks and constraints. In the current price environment, Alberta’s energy sector is positioned for only modest expansion in capital spending.

There are threats beyond our control that add uncertainty to our economy including NAFTA negotiations and the opposition to pipeline expansion. Household debt levels are also at record levels, and borrowing costs are rising. As well, the global economy may be shifting into another period of financial and market volatility.”

ATB Financial’s Economics and Research team is forecasting real GDP growth of 2.8 per cent this year, followed by 2.2 per cent in 2019.

Read the complete ATB Financial Alberta Economic Outlook (February 2018) and watch ATB’s Chief Economist Todd Hirsch summarize the report.