Don’t get too pessimistic about the current state of Alberta’s economy; but don’t be too optimistic about its future, either.
Ian Glassford, Servus Credit Union’s chief financial officer, planned to offer this seemingly contrary bit of advice to a gathering of Servus members in Red Deer on Wednesday evening. Speaking to the Advocate prior to his presentation, he cautioned against placing too much credence in doom-and-gloom reports about Alberta’s economy.
“It’s not in collapse right now,” he said, noting that Servus is off to a good start this year despite the supposed downturn.
“We’re seeing no loan losses resulting from oil at all.”
The impact of oilpatch layoffs hasn’t really trickled through to the rest of the economy, said Glassford. Many of those cut loose were contract workers from other provinces, and most received severance packages that’s enabled them to keep spending.
As a result, stores and restaurants remain busy.
In the real estate market, a rise in listings and a drop in sales aren’t harbingers of a housing sector collapse, continued Glassford. Sellers are simply looking to take advantage of current high prices and buyers are standing back in hopes that prices will slide.
“That doesn’t mean you’re going to see a collapse in real estate.”
But Glassford tempers this positive viewpoint with a disconcerting analogy: before a tsunami hits the water recedes.
“There’s still a big wave coming to Alberta, eventually.”
Oil prices could remain lower and for longer than many people anticipate, warned Glassford, and the resulting pain may not dissipate quickly.
“Our experience has been when oil goes up — for us, not for every industry — it’s about two years that we continue to see the impact of people going bankrupt and things like that.”
His advice is to prepare for the worst, so that any surprises are good ones.
“Adjust your lifestyle to what’s coming in, and be prepared for lower, longer.”
Glassford added that the province has weathered economic downturns before, and will survive this one.
“Alberta has a pretty good history of being able to work through this stuff.
“It’s remarkably resilient.”