The economy in Alberta is facing challenges that will restrict growth in 2019 but there is unlikely to be a recession.
The latest provincial outlook from ATB Financial calls for growth of 0.7% in 2019 before more than doubling to 1.6% in 2020.
Weaker growth in 2019 is due to several converging factors including sluggish - possibly negative – growth in the jobs market; weak retail sales; lower capital investment and drilling rates in the oil industry; and slower global growth.
On the positive side, population growth is expected to continue (1.5% in 2019 and 1.3% in 2020) and manufacturing sales are expected to maintain their momentum.
“Despite all the headwinds hampering Alberta’s economic progress, it looks like we will avoid slipping back into recession. With that said, we’ve cut our growth forecast in half from where it was in March,” said ATB’s Chief Economist Todd Hirsch. “With real GDP growth of just 0.7 per cent, it is going to feel slow in our province.”
Weak housing starts
Housing starts are not expected to recover in 2019 from their weakness in 2018.
Last year, starts were down 11.4% and ATB forecasts another 13% drop in 2019.
More market update: