'This is not a new story': ATB report shows economic growth stalled in Alberta
'We're not expecting a recession ... but we are seeing essentially a stalled economy'
The 'sluggish' pace of the oil and gas sector is expected to continue to limit the growth of Alberta's economy.
A new report from ATB Financial is calling for only a 0.8 per cent real GDP growth for the province in 2019 and 2.0 per cent in 2020. The report shows GDP grew by 2.3 per cent in 2018.
ATB chief economist Todd Hirsch doesn't expect people will notice a difference.
"We're not expecting a recession ... but we are seeing essentially a stalled economy," Hirsch said.
The Alberta Economic Outlook report also points to international factors like tariffs, a possible no-deal Brexit and global economic contractions as issues that influence Alberta's export sector.
Hirsch called the report disappointing but not surprising.
"This is not a new story," Hirsch said. "This has been the dominant theme of Alberta's economy for more than a year. But now, in September, there really hasn't been a whole lot of improvement at least with respect to industry's confidence that in fact we are going to solve this capacity issue."
He said the improved 2020 outlook hinges on resolving transportation issues, including pipelines. Hirsch also expects to see more court challenges and more delays.
"Unfortunately I think we're going to have to get to near completion on the pipelines and oil flowing through it before there is a wholesale improvement in attitude in the industry."
The rebound also relies on the ratification of the U.S.-Mexico-Canada Agreement, according to the report.
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Spending is also expected to remain down in the oil and gas sector for 2018. The report calls for a three per cent reduction in spending this year compared to 2019, which would be 55.4 per cent below the record set in 2014.
The report also looks at the job numbers, which for much of 2019 was only 0.4 per cent above the 2018 average and about one per cent above the national average.
Consumer spending is also down, which according to the report is not only a reflection of the overall weakness of the provincial economy, but also can act as a contributor to it.
Alberta's construction industry is also left with lingering questions the report blames on trade uncertainty. It shows that building permits around the province are expected to be about 15 per cent lower than in 2018.
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Hirsch is, however, optimistic about the agriculture sector's mid to long-term potential.
"The world has a complicated relationship with hydro-carbons," he said. "They still need hydro-carbons, but the global economy's relationship with high quality food is not as complicated. I think Alberta and Canada really have a great niche to fill that in."
With files from Andrew Brown