ATB Financial’s newest Alberta Economic Outlook shows Alberta is on track to recover some of the ground lost during the global pandemic and oil price crash.
ATB is forecasting the province’s real GDP will grow by 4.1 per cent this year followed by 2.6 per cent growth in 2022.
“At this rate, Alberta’s economy will surpass where it was before the global pandemic in 2023,” said ATB Financial.
The forecast assumes that the pandemic will be largely quelled in Canada by the fall, and that a staged reopening of the provincial economy will take place between now and then.
The forecast also assumes that U.S. and global demand for oil will continue to recover and that OPEC+ producers will maintain limits on the amount of supply they add to the market.
“While the post-pandemic period may feel like the Roaring 20s to some, it will be challenging for many others.”
ATB said it is forecasting a K-shaped recovery.
“The upper branch of the K will be higher-wage workers who didn’t lose their jobs during the pandemic. Pent-up demand among this group will provide a boost to consumer spending. The lower branch will be formed by workers who either return to low-wage employment or remain out of work because their former employers have permanently closed or require fewer staff.”
ATB said things are looking up in the energy sector, but capital spending will still be down compared to 2019 — which was already a slow year.
“Despite the recent oil price rally, ATB is forecasting that the West Texas Intermediate benchmark will average US$51 a barrel this year. If prices continue to beat expectations, we might see an increase in capital spending.”
Alberta’s growing tech sector is an economic bright spot and received a boost from news that Vancouver-based mCloud Technologies Corp. is moving its head office to Calgary, and Infosys has also chosen Calgary for the next phase of its expansion into Canada.