Alberta’s 2015 slowdown

THINK OUTSIDE THE BOX:  Unlike a few other forecasts that are calling for recession, ATB Financial is still forecasting a small amount of growth this year.

Today, ATB Financial is releasing its latest Alberta Economic Outlook for the second quarter of 2015. This is the most up-to-date snapshot of the province’s economy and our research team’s best estimate of what we can expect this year.

The forecast pegs annual real GDP expansion at 0.8 per cent, the weakest in six years. The rate has also been reduced from the 2.0 per cent growth rate that was forecast in the first quarter outlook, released on January 7, 2015.

While difficult to predict, oil prices should begin to stabilize and increase gradually at the end of the summer or early fall. But the increase could be very slow. We are more likely to see West Texas Intermediate in the range of $50 to $60 per barrel than to see it bounce back up to $107.

Unlike a few other forecasts that are calling for recession, ATB Financial is still forecasting a small amount of growth this year. But regardless of whether it’s modest contraction or modest growth, all of the major forecasts for the province (including ATB’s) now expect growth to be near zero per cent this year.

While it will be a challenging year, Albertans shouldn’t panic. It will by no means be the worst economic year in recent history. Six years ago the province suffered a deep contraction (-4.2 per cent). As hard as it will be for a lot of people, the slowdown is a normal part of the cyclical nature of Alberta’s economy.

The full ATB Financial Alberta Economic Outlook can be accessed here.

 

Todd Hirsch • Chief Economist             March 31, 2015

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