Halfway through 2015: An economic update

THINK OUTSIDE THE BOX:  As hard as this year will be for many, it’s vital that Albertans remain positive; an economic slowdown is a normal part of the business cycle.

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

Better growth prospects from other parts of the world and the exit of some higher-cost oil producers caused oil prices to show some price stabilization over the second quarter of the year. However, this past weekend’s Greek referendum results and the instability of the Chinese stock markets shows that heading into the third quarter, investor nervousness and oil price volatility are still very real—WTI prices closed just under $US 53 per barrel yesterday. Over the course of the summer, we expect prices continue to fluctuate and start to rebound back to $US 60 per barrel by year-end.

The revised forecast pins annual real GDP growth at 0.4 per cent, the weakest in six years. The rate has been reduced from the 0.8 per cent growth rate that was forecast in the second quarter outlook, released on March 31, 2015.

While some forecasters continue to call for a recession in Alberta, ATB Financial remains confident that our province will see some growth this year (albeit small). But despite the differences in opinion, all of the major forecasts for the province have one thing in common; economic expansion is expected to hover around zero per cent this year. Even though 2015 will be challenging, the latest Alberta Economic Outlook shows that this year won’t be the worst economic year in our recent history. Many forget that six years ago Alberta experienced a contraction of 4.2 per cent.

As hard as this year will be for many, it’s vital that Albertans remain positive; an economic slowdown is a normal part of the business cycle.

Nick Ford    Economist   July 7, 2015

 

No Comments

No comments yet.

RSS feed for comments on this post.

Sorry, the comment form is closed at this time.