ATB Financial is forecasting real gross domestic product growth in Alberta of 2.3 per cent this year and 2.1 per cent in both 2019 and 2020.
In its Economic Outlook, which was released Friday, the financial institution said economic growth in the province was 4.4 per cent in 2017.
“As we approach the end of 2018, Alberta’s economy is stable and growing slowly. Still, challenges exist. Continued delays and uncertainty around pipeline construction have meant the Western Canadian benchmark heavy oil price has not seen the same lift as the North American benchmark. A lack of available transportation capacity has produced an oversupply of oil in Western Canada, which has lowered its price. As a result, investment and sentiment in the energy industry are restrained,” said ATB in its report.
“The state of Alberta’s economy is improving, but gradually and unevenly across sectors.The pace has been disappointing to many people, especially those who continue to look for work. The robust economy of five years ago seems more and more distant.
“Statistically, however, the province is moving in the right direction. Retail activity, manufacturing, wholesale trade, interprovincial in-migration and other indicators are at (or are close to) pre-recession levels. Sectors of growth include agriculture and agri-food, tourism, transportation and logistics, and the tech sector.”
ATB said prospects in the energy sector remain largely unchanged from its August Outlook as the situation surrounding the Trans Mountain pipeline expansion is unresolved and continues to be discouraging and a point of frustration. Adding to this is the recent judicial ruling imposing more delays on the Keystone XL pipeline project. The lack of adequate oil transportation capacity has resulted in a surplus of oil in Western Canada and a depressed price, it said.
“On a positive note, one of the clouds of uncertainty hanging over the provincial and national economy was removed when NAFTA negotiations concluded with the new USMCA. The new trade deal still has to be ratified and other trade disputes with the U.S. remain in play, but the USMCA provides more clarity and certainty on trade with our biggest customer than we had a few months ago,” said the report.
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