Alberta’s economy has been in a tailspin since the 2014 crash in oil prices and further slammed by the Fort McMurray fires earlier this year, but a major Canadian bank predicts the province will actually lead the country in GDP growth in both 2017 and 2018.
“The good news for Alberta is that the worst is in the rear view mirror,” reads a new report from TD Economics.
“With oil production having been restored by July, and reconstruction efforts having already begun, the second half of the year promises to be better.”
The report predicts that oil-related investments will “stabilize” next year with gradual growth in oil prices to a mark above $50 US per barrel.
Alberta’s GDP growth should top two per cent in 2017 and 2018, according to the forecast, which would be the highest of all provinces in both years.
But even that level of growth would mark only “a muted rebound compared to past experiences, and will barely bring the level of GDP back to that recorded in 2014,” the report cautions.
“While certainly an improvement, the pace of growth is only about half that recorded coming out of the previous recession and economic activity will still fall short of 2014 levels,” it reads.
The country-leading growth forecast for Alberta is as much due to slowdowns foreseen in other provinces.
The report anticipates that cooling housing markets in B.C. and Ontario will take some steam out those economies, while the “several headwinds” facing Newfoundland and Labrador will delay the recovery in that oil-producing province.