Edmonton economy to improve only slightly in 2020, city's chief economist says
Capital city can expect ‘very modest’ growth, John Rose says
After a year marked by stagnant growth and weak job numbers, Edmonton will see "sluggish" growth in 2020, says the city's chief economist.
"We're coming off a very difficult year in 2019 and we've seen significant weakness in several key areas," John Rose said in an interview Thursday with CBC Radio's Edmonton AM.
"I think people really have to manage their expectations. Growth rates are going to be very, very modest."
Edmonton's economy is comparatively diverse, said Rose. Less reliant on the energy sector than other Alberta cities, the provincial capital has been surprisingly resilient. However, the prolonged slowdown is starting to bear down on Edmonton businesses, he said.
Growth in Edmonton's real gross domestic product (GDP) hovered around 0.5 per cent in 2019, the lowest it's been since 2015, soon after oil prices started to plunge.
There will be some growth in the coming year, Rose said. But it will be slight and lopsided, favouring sectors less intertwined with the energy sector.
He expects Edmonton's GDP will increase by about 1.4 per cent in 2020 and 2.5 per cent in 2021.
The local economy is in recovery mode and the labour market continues to tighten, shaking consumer confidence and muting investment.
In November, as Alberta lost 18,000 jobs, the unemployment rate in Edmonton climbed to 7.7 per cent. Rose estimates 11,000 positions were lost in both full-time and part-time work in Edmonton during the year.
"What we'll see is a very modest acceleration in growth," he said. "People will feel it but it will be very modest. We're talking about 1.3 or 1.5 per cent growth in 2020.
"Historically, that's rather low, but nonetheless it will be much better than 2019 where we were stuck at 0.5 during a very, very weak year."
Oil prices are likely to remain volatile and activity in the energy sector will be muted, undercutting growth in manufacturing, construction, logistics and professional services.
"We're not going to see a really robust consumer side of the economy. We're not going to see a very robust residential construction sector," Rose said.
"It's going to be sluggish, unfortunately."
We'll do reasonably well in Edmonton but there will be no boom.- John Rose
The latest report from ATB Financial, released in December, provides similarly stunted projections for the Alberta economy.
According to ATB, provincial GDP growth in 2019 was 0.4 per cent — well below the 20-year average of 2.8 per cent.
ATB anticipates a slightly better 2020, with growth of 0.9 per cent leading to a better 2021, with GDP forecast to grow by 2.1 per cent.
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The energy sector is stuck in "slow mode," Rose said.
"I've been at this now 10 years and I've been waiting for the Trans Mountain Pipeline [expansion] and Line 3 and the Keystone XL to hit and none of that has happened," he said.
"When I see it, I'll believe it. Right now, I'm not making any assumption about a sustained expansion on the energy side of the Alberta economy.
"We'll do reasonably well in Edmonton but there will be no boom."