Released Thursday morning, the analysis predicts that the province’s economy – which has been bludgeoned by COVID-19 closures and falling oil prices in 2020 – will experience GDP growth if the pandemic is “largely stifled” by the fall and that the demand for oil continues to recover. But ATB’s prediction of a K-shaped recovery for Alberta means some industries are expected to rebound while others will be left behind.
“If we think of that top branch of the letter K, it’s companies that didn’t have to shut down during the pandemic and workers who didn’t lose their jobs,” said Rob Roach, deputy chief economist of ‘ATB. Eyeopener de Calgary Thursday.
“This group of Albertans is in a fairly good position as the economy reopens… [but] unfortunately we have the lower branch of this letter K, and these are companies that had to partially close, maybe still closed or had to close permanently, and a lot of low-paid workers. ”
Expected GDP growth if the assumptions materialize
ATB’s forecast is based on the phased reopening of the economy in Alberta and the fact that “US and global oil demand will continue to recover and OPEC + producers will maintain limits on the amount of oil. offer they add to the market ”.
With these two variables in play, ATB expects Alberta’s GDP to grow 4.1% in 2021 and 2.6% in 2022.
With prices already on the rise for the first three months of the year, the Alberta oilfield is also expected to experience a “much better” 2021 if current conditions continue.
Capital spending is expected to be 3% higher than in 2020, but will still remain 31.5% lower than it was in 2019.
The resale home market is also expected to continue to gain momentum – albeit modestly, and “weak population growth” is expected to limit new home construction.
Alberta’s tech, agriculture and agri-food sector set to grow in 2021, Infosys and mCloud Technologies Corp. both having chosen to expand to Calgary and the setbacks in the beef industry have eased with the pandemic.
“The big highlight is that we’re growing again, and the headline of our economic forecast is ‘on the mend,’” Roach said.
“And I think… 2021 will be a much better year than 2020, but we’re not completely healed. We still have a lot of recovery to come. So we will have to be patient before we get to where we really want to be. ”
“A big problem for the future”
Although they are “on the mend”, the possibility remains for a large number of companies to close their doors in 2021, according to the prospects.
Although employment growth of 3.6 percent is expected this year, the unemployment rate is also expected to remain high, in part due to the arrival of new people into the labor market.
Those with higher incomes who were able to continue working during the pandemic are likely to unleash pent-up demand for consumer goods and services in Alberta.
Meanwhile, sectors hardest by the pandemic like tourism, hotels and restaurants will rebound, but from losses of the past 18 months.
” Good that [those sectors are] will resume growth… we’re not there yet, ”Roach said.
“The economy has not fully opened up. If you are a tourism operator or a large event operator, things are not even close to normal. So they are the ones who are going to have a hard time. ”
Low-income people struggling before the pandemic are expected to face few job opportunities – and even chronic unemployment – due to jobs that won’t come back and government emergency relief programs that run out. , said ATB.
“Because this was happening before the pandemic, whether it’s automation or just changes in the economy, low-wage jobs won’t be in demand,” Roach said.
“And that’s going to be the challenge for these workers, and that’s, I think, the big deal going forward.