Alberta’s economy will grow ever so slightly in 2020, according to a forecast released Thursday by ATB Financial.
The Alberta Economic Outlook predicts GDP will grow by 0.9 per cent next year, driven by increased oil production, pipeline construction, an uptick in natural gas prices, a strong tourism sector and ongoing population growth.
The financial institution warns, however, such growth depends on progress being made in expanding oil pipeline capacity and toward resolving international trade disputes.
“With construction of the expansion of the Trans Mountain pipeline finally under way and the Enbridge Line 3 project moving forward, things are looking up at least a little for Alberta’s beleaguered oil patch,” said Todd Hirsch, vice-president and chief economist at ATB Financial.
“Despite this, Alberta continues to swim upstream against a current of external economic challenges such as the Chinese ban on Canadian canola, the trade war between the U.S. and China and ongoing opposition to new pipelines.”
Other key findings in the Economic Outlook include:
- The price of Alberta’s natural gas will go up over the next few months but won’t do much to reverse the sector’s low growth.
- Retail sales are down and unlikely to recover by the end of the year as a result of the sluggish economy and high consumer debt.
- Both residential and non-residential construction spending remains low despite a pick-up in activity in the third quarter.
- Alberta’s unemployment rate is well above the national average and is forecast to remain high.
Despite the government of China lifting its ban on Canadian meat, Alberta farmers remain challenged by the country’s canola ban, a difficult harvest and soft prices.
“If global trade relations improve, we should see some growth in our manufacturing sector,” said Hirsch.
“Other bright spots include tourism and the tech sector but 2020 will still be a slow year for the Alberta economy as oil and gas investment remains constrained by limited transportation capacity.”
The full outlook can be read here.