Calgary

Alberta economy poised to grow in 2017 but job recovery will lag, Todd Hirsch forecasts

The provincial economy will climb out of the depths of the recession in the new year, but the chief economist for ATB Financial says it’s not going to feel much like a recovery for lots of Albertans.

Chief economist at ATB Financial predicts modest recovery even as anxious mood persists

Todd Hirsch, chief economist at ATB Financial, says increased consumer spending on vehicles is a sign of confidence that the economy is recovering. (CBC)

The provincial economy will climb out of the depths of the recession in the new year, but the chief economist for ATB Financial says it's not going to feel much like a recovery for lots of Albertans.

Todd Hirsch gave his 2017 economic forecast Thursday at the Canadian Club of Calgary's lunch event at the Ranchmen's Club.

He said while the economy is expected to post real GDP growth of 2.1 per cent, a robust job market recovery could still be several months away.

"We expect the unemployment rate will probably crest a bit higher before it comes down," he said.

Hirsch said the deep job losses in Alberta over the past two years have created a pervasive mood of fear and anxiety in the province. 

"That sentiment is real and it does affect the economy," he said. 

The rebound in the price of oil to the $50-range is having a positive impact in Alberta's energy sector, especially for companies that restructured sufficiently during the downturn, Hirsch said.

But he said he expects the price of WTI oil to hover around $45 to $55 through 2017 and beyond — not a strong enough price rebound to spur significant investment or employment gains.

The incoming Donald Trump administration in Washington will likely be a good news, bad news scenario for the Alberta economy, Hirsch said.

While some of Trump's cabinet picks — such as Exxon Mobil Corp. chief executive Rex Tillerson for secretary of state and former Texas Governor Rick Perry for energy secretary — are being cheered by some in downtown Calgary, the incoming U.S. president's hostility to the North American Free Trade Agreement is worrisome, Hirsch said.

Trump's pledge to tear up NAFTA would be "unequivocally bad for Canada" and business and political leaders must work to avoid that outcome, Hirsch said. 

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