TD Economics released a new provincial economic forecast yesterday.
The take-home message for Alberta is our economy is rebounding nicely. Alberta will lead the country in economic growth this year at 2.6% (tied with Ontario) and in 2018 at 2.3% (second place goes to SK at 2%).
TD says part of the reason Alberta’s economy is rebounding faster and stronger than Saskatchewan’s economy from recessions caused by the oil price downturn is the government of Alberta has been stimulus budgeting while the government of Saskatchewan raised and expanded the provincial sales tax and cut spending in their recent budget.
Alberta’s economy is more diversified now than it was during the oil price downturn of 1986, but of course the province’s economy is still deeply tied to oil. TD thinks the price of oil will range from the high-40s at present to mid-50s later in the year.
This price range isn’t enough to entice new capital investment in the oil patch, but TD thinks the price is high enough to stop “the bleeding in capital spending” and that the worst is likely behind the industry and the province.
Some Alberta political observers might be surprised to know that the rig count started to drop in mid-2014, well before the NDP took power (that’s not a knock on the PCs, it’s not as if GoA controls the international price of oil). The increasing rig count in the last year is part of the reason Alberta is up 24,000 full-time jobs since July (it also doesn’t hurt that GoA is hiring more health care workers, is hiring in justice to improve the court system, and is hiring more teachers because of student enrollment growth).
Alberta employment is forecast to increase a bit this year (but only a third of the national average) and we’ll lead the country in job growth in 2018 (double the national average).
TD Economics’ March 27, 2017 Provincial Economic Forecast: https://www.td.com/document/PDF/economics/qef/ProvincialEconomicForecast_Mar2017.pdf