The economies of Calgary and Edmonton continue to recover from the recession of 2015 and 2016, but the pace of growth is moderating, according to the Conference Board of Canada’s Metropolitan Outlook: Autumn 2018, which was released on Tuesday.
“Pipeline capacity constraints mean the energy sector and related industries in the two Alberta cities are not reaping the full benefits of higher oil prices. All in all, Calgary and Edmonton’s economic growth prospects pale in comparison to those of the boom years over 2010-14. On a positive note, job growth is expected to remain decent in both cities over the near term,” said the report.
Calgary’s economy is expected to expand by 2.5 per cent this year and 2.3 per next year, down from last year’s booming 4.9 per cent increase, it said.
“Although modest, growth in the Calgary economy will be widespread, with the primary and utilities sector, which includes oil and gas extraction, manufacturing, and construction all expected to post gains in the next two years,” said the conference board.
“Most of the region’s services sectors are also forecast to post growth higher than two per cent this year and next. The wholesale trade sector will lead the way, followed by the transportation and warehousing industry, thanks to growth in energy exports.”
The report said economic growth in Edmonton will be led by the oil and gas industry and construction. The local construction sector is poised to grow for the first time in four years in 2018, with a similar expansion on tap for next year thanks to stronger energy investment and the continued downtown revitalization. At the same time, the services-producing industries are on track to record broad-based growth this year.
In all, Edmonton’s economy is forecast to grow by 2.3 per cent in each of 2018 and 2019, it said.
“While the economies of Canada’s western cities will remain healthy, a repeat of last year’s strong performances is not in the cards, as rising interest rates and high household debt have taken a bite out of both consumer spending and housing market activity,” said Alan Arcand, associate director at the Centre for Municipal Studies of the Conference Board of Canada. “Next year, western cities will once again be among the top economic performers, but the pace of economic expansion will remain moderate.”
The report said Winnipeg will have the fastest growing metropolitan economy among western cities this year at 2.7 per cent and rank nationwide behind only Montreal, which will grow at 2.9 per cent.
Mario Toneguzzi is a veteran Calgary-based journalist who worked for 35 years for the Calgary Herald, including 12 years as a senior business writer.
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