Consumer confidence jumped in Alberta during September, but the province is still in for a slow economic recovery, according to the Conference Board of Canada.
The board’s latest economic outlook forecasts that the pace of recovery in Canada from COVID-19 will flatten, if not stall, between now and mid-2021.
Senior economist Sam Goucher said recovery in the oil and gas sector will be more prolonged.
“We don’t see oil prices even recovering to pre-COVID levels until late 2022, early 2023. That’s especially bad news for the critical industries in Alberta. Right now, you’re seeing rig levels that are completely depressed compared to last year,” Goucher said.
“If prices don’t recover until 2023, it could be a long time before we see that industry start to make up lost ground.”
He said Alberta’s economy remains among the worst in Canada, along with Newfoundland’s.
But as dire as the conditions are for the energy industry, companies have been adapting since 2014, when oil prices originally dropped, said Groucher, whose board is not-for-profit think-tank dedicated to researching and analyzing economic trends.
“They are battle hardened. They have already adapted to a low-price environment. They’ve been through a price war before. They operate more efficiently than ever right now, so it’s not ideal conditions, but they can weather the storm.”
Consumer confidence in Alberta increased 15 percentage points in September and is now only 2.8 percentage points below its February level.
Alberta has the highest share of positive views on future finances at 20.5 per cent, and Albertans’ views on making major purchases during the month recovered to their pre-pandemic levels.
Goucher said Canadians, including Albertans, have relied quite heavily on federal income support programs, which propped up the economy to boost spending.
Canada’s unemployment rate is not expected to return to pre-COVID levels until 2025.
“People will have to come to terms that the recovery will be a lot slower. We’re not going to see more double-digit increases in employment. The quick fixes are over,” Goucher said.
“Moving forward, we’re going to see a lot of the structural damage COVID caused. It’s going to rise to the surface and we’ll be able to see the damage it has done to Alberta’s economy.”