Alberta economy to shrink by 1.9% in 2016, forecasts ATB
Bank's quarterly outlooks have continually worsened since last year when it predicted no recession at all
Alberta's real gross domestic product actually shrunk by four per cent last year and is expected to decrease by another 1.9 per cent this year, according to the latest economic outlook from ATB Financial.
That's a far cry from the prediction the bank made at this time last year when it said the province would likely avoid a recession in 2015.
"Now that we're halfway through 2016 we appear to be kind of right in the belly of this recession," said ATB chief economist Todd Hirsch.
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Even as early as last October, ATB was projecting a modest economic recovery in 2016, but it now says that hope has evaporated.
A month-long shutdown at oilsands facilities in Alberta after the Fort McMurray fire resulted in about 30 million barrels of foregone production, according to the report, costing the industry an estimated $1.6 billion in lost revenue.
"This coupled with a drop in investment, sliding retail sales and a weak labour market have pinned our province's economy down for another difficult year," the report states.
ATB expects the province's unemployment rate will rise above eight per cent this summer. It also predicts the weak economy will continue to weigh down the retail and housing markets.
Drop in restaurant sales
That comes as little surprise to Vessy Haygarova. She works as a marketing co-ordinator for Group933 Hospitality, which owns Roosevelt Eatery and four other restaurants in Calgary.
"We've definitely seen a drop in sales — I'd say between 20 and 25 per cent," she said. "It's been a challenge but we're keeping positive."
Haygarova said her company has also been seeing a rise in job seekers without restaurant experience.
"It's a lot of high-end applicants that are coming from engineering jobs or oil and gas corporate jobs."
Despite these challenges, ATB still expects Alberta's economy to bounce back, buoyed in part by the rebuilding of Fort McMurray.
The report states that "barring a major global economic event later this year, a modest rebound in 2017 is likely."
GDP growth in 2017 is forecast at two per cent.
With files from Dave Gilson