2017 was a year of recovery for Red Deer’s economy, according to The Conference Board of Canada.
“With oil prices starting to come back we saw nice bounce back activity in Red Deer last year, growth just above four per cent so it’s quite a good news story for Red Deer last year,” said Alan Arcand, associate director for the Centre for Municipal Studies with the conference board.
Construction in advance of the 2019 Canada Winter Games has given a boost to the local economy, as the games will do next year, he said.
“I think that’s something to look forward to.”
On Tuesday morning the conference board hosted Western Business Outlook for 2018: Red Deer at Sheraton Red Deer.
According to the conference board, the upward trend for Red Deer is expected to continue in 2018 and 2019 with real GDP growth expected to exceed two per cent in both years. The rebound in the economy will be felt in the job market with the unemployment rate forecast to fall from 9.3 per cent in 2016 to 7.3 in 2018.
Arcand said consumer spending helped drive growth last year.
“During a recession people are uncertain about what’s going to happen and they hold back purchases, especially on durable goods that are expensive like cars and furniture for the home. All these delayed purchases are made in the year of recovery which is what happened in 2017.
“But with pent up demand satisfied, now growth will moderate to more lower levels in the coming years.”
He said the province couldn’t make up for the slump in oil industry investment, but government did try to stimulate the economy through spending and investment, he said.
“You did see some projects throughout the city that helped offset somewhat the decline on the business side of the economy and in the housing market. Still construction activity was really, really weak in 2015 and 2016. Even in the recovery, and this year going forward, levels of construction activity are going to remain well below pre-recession peaks.”
He said the economy is growing, but it will be matter of expectations.
“It’s going to feel different than before the recession because growth is going to be much slower than the city experienced from 2010 to 2014. A lot of it has to do with just oil prices.”
The bottleneck created by the lack of pipelines for oil is going to be with Alberta for a couple of years. Rail capacity is already a problem so a pipeline is necessary, Arcand said.
“It would be a great benefit to the province, and the country as a whole, if we could get oil to tide water, eventually expand the number of markets Alberta can get its oil to and increase the dollar value of each barrel that is produced in Alberta going forward. Realistically it’s going to be a couple of years before one of these pipelines get finished assuming they get started eventually.”