Alberta stands to make the biggest economic rebound in the country as the pandemic wanes later this year, according to the Conference Board of Canada forecast.
But that’s only because Alberta lost the most GDP (gross domestic product) in 2020.
The good news scenario for the province is certainly tempered by the bad news of last year, acknowledged Red Deer Chamber of Commerce CEO Rick More: “The obvious point here is that we did the worst, so we have the most to gain…
“It’s been so dreary this whole year that we have been looking at the glass half full, but when you look at (climbing) world oil prices and the rise in demand, that’s helping Alberta a lot,” added More.
”Once we get the vaccines and pandemic under control, I think it will lead to longer term growth.”
According to the Conference Board of Canada forecast, Alberta’s vaccine rollout could see “large swaths” of the population vaccinated by mid-year. The optimism that will spring from that, as well as a positive outlook for oil and natural gas prices, and generally healthy household finances, are considered good indicators that Alberta’s economy and labour market will strengthen over 2021.
However, the board believes these positives won’t quite make up for Alberta experiencing the largest decrease in real GDP in the country in 202o with a nearly eight per cent plunge. The predicted rebound of 6.4 per cent in economy activity in 2021 is not anticipated to quite cover last year’s losses.
“The provinces that recorded the smallest declines in economic activity last year will have weaker recoveries in 2021. Conversely, Alberta will enjoy the largest increase in real GDP in 2021 as its plunge of 7.7 per cent in economic activity last year sets the stage for a stronger rebound,” the board stated.
More thinks Conference Board could be wary in assessing Alberta’s economy by the end of 2021.
He noted rising world oil prices have already exceeded expectations, helping to reduce the forecasted provincial deficit. Also working in Alberta’s favour — as the Conference Board noted — is the U.S. oil production cuts and supply restrictions by OPEC.
Every province is anticipated to sharply rebound in real GDP growth this year, as vaccinations lead to a gradual lifting of provincial restrictions on travel, entertainment and other activities.
More agrees with the Conference Board’s assessment that the economic recovery will receive a boost from “pent-up demand” and that those who managed to keep their jobs during the pandemic have ramped up their savings.
With Alberta’s vaccination program well underway and the weather warming, he’s already feeling more positivity in the air.
“We are just at the starting line. When it rises, there is going to be a stampede. People will want to get back out there… When travel opens up, there is going to be a domino effect.”
Airfares could be higher at first, and not affordable for all, but More believes this climate could present opportunities for more low-cost carriers.
The post-pandemic ground is also expected to shift in the workplace, with more employers reconsidering costly office space after employees have worked from home, and rethinking conventions after the use of Zoom. But More believes people’s mental health and need for social engagement must also be considered in building happy workplaces.
He’s buoyed by the support that local restaurants are receiving from clients who are happy in-person dining has resumed.
Retailers could have a harder time competing with online shopping, which gained popularity during the pandemic. But More believes these business owners will have to change focus to provide what virtual shopping can’t do — give people the communal experience of a farmer’s market, complete with entertainment and specialty shops.
“Those who are quick-off-the-mark (to change) will succeed,” he predicted.