Alberta's economic growth to leap from last place in 2019 to country-leading in 2020: Conference Board
Oil production cuts and depressed energy investment continue to drag, but 'positive signals' on the horizon
Alberta will see only mild economic growth in 2019 as the province continues to absorb the effects of oil production cuts and depressed energy investment, but the outlook is much rosier for 2020, the Conference Board of Canada says in a new forecast.
The board's Provincial Outlook, released Wednesday, forecasts that Alberta's real GDP growth will slip to 1.3 per cent this year, trailing every other province.
"Economic growth in Alberta will slow markedly this year as the province continues to crawl its way back from the recession it suffered in 2015–16," says the report written by Marie-Christine Bernard, the board's director of provincial forecasting.
Real business investment in the province is expected to fall again this year — the fifth consecutive year of losses.
From last to 1st in growth by 2020
But Bernard says several factors will help propel Alberta's economic growth rate from last place this year to first place — at 3.5 per cent — in 2020.
"Positive signals on the oil front have improved the outlook in the oil and gas sector," Bernard said.
Mandatory oil production cuts that pushed oil inventory levels five million barrels below 2018 levels have helped to shore up Western Canadian Select prices.
And investment is expected to accelerate in 2020 as those production cuts are lifted and as clean power initiatives go ahead, such as Suncor's replacement of coke-fired boilers with natural gas-fired units. Imperial Oil's Aspen project will also be entering its second year of construction, Bernard notes.
This year, employment is expected to get a 1.1 per cent bump — with a gain of 8.8 per cent in the manufacturing sector — partly driven by ramped up production at the new Sturgeon Refinery near Edmonton.