The worst appears to be over.
After being pummelled for two years, the province’s economy is expected to grow this year, with the pace slowing a little in 2018, said Conference Board of Canada deputy chief economist Pedro Antunes on Thursday.
Red Deer may do better still.
“For Red Deer we do feel there is enough momentum to keep going into 2018 …” said Antunes, who was speaking at the Western Business Outlook — Red Deer event organized by the Red Deer and District Chamber of Commerce.
The city’s economic hit in 2016 was “very deep,” said Antunes. Red Deer shed 5,000 jobs last year, wiping out about six years of job creation gains, he said, cautioning statistics for small cities are not as precise as larger samples.
“Nonetheless, we do feel that’s too much of a hit and we should see employment coming up over the next two years.”
Likewise, consumer spending appears to have bottomed out and should start improving, which will be welcome news to retailers.
Red Deer’s housing market softened considerably, but the area remains affordable and prices are stable, which should put it on the road to recovery.
Developers were “very prudent” when it came to new construction so those numbers were way down last year. “We think there can only be an upside as we go forward to those numbers,” he said.
Provincially, economists are also predicting that the corner has been turned.
“I guess the theme is the worst is over,” he said. “I think that’s true for the province of Alberta and for many of its cities.”
In 2017, Alberta is expected to lead the nation in gross domestic product growth at 2.7 per cent. The Canadian average is forecast at two per cent.
However, world oil prices aren’t expected to top $60 a barrel until late 2018.
“With the oil price outlook that we have we don’t expect this kind of growth to continue; so little softer growth as we look to 2018.”
Antunes said the downturn was the “longest, steepest recession in recent memory.” 2009 was bad, but oil prices and the economy recovered quickly.
“This time around it was a much more dragged-out situation. But at least we have hit bottom and we are looking for growth.”
On the international front, there are a number of risks ahead, said Conference Board chief economist Craig Alexander.
Among them, U.S. President Donald Trump’s protectionist impulses could spell trouble, especially if it sets a precedent other world leaders follow.
When the financial crisis hit in 2008, G-20 nations met and all agreed they would resist protectionism and trade barriers, said Alexander.
“What they knew from history was in the 1920s and 1930s what was going to be a very bad recession was made into the Great Depression by protectionism.”