Alberta’s economy could return to pre-pandemic levels by 2023: ATB

CALGARY (660 NEWS) – Alberta’s economy could recover to where it was before the COVID-19 pandemic but not until 2023, according to a new report.

The latest economic outlook from ATB Financial, titled “On The Mend”, shows the province’s GDP growth is expected to grow by about 4.1 per cent this year but will only be 2.6 per cent next year.

“While we’re moving in the right direction, we still have a ways to go, we’re not fully healed yet,” said economist Rob Roach. “It’s going to take a couple years before the recovery is where it needs to be to start growing compared to pre-pandemic levels.”

The report anticipates Alberta will move to a K-shaped recovery, where higher-income earners and businesses that never closed during the pandemic will recover quickly, while others will struggle.

“Businesses that had to close temporarily or in some cases permanently and individuals in that more low-wage end of the continuum, they’re going to face a tougher road going forward. Two somewhat different realities in terms of the recovery going forward.”

The research showed that demand among higher-wage workers will help boost consumer spending while the lower branch will be formed by workers who either return to low-wage employment or remain out of work because their former employers have permanently closed or require less staff than before.

Despite trouble in the oil and gas sector, with huge declines in oil production, prices and the cancellation of the Keystone XL pipeline, the ATB outlook anticipates the industry could have a better 2021.

“Similar to the overall economy, Alberta’s energy sector is going to pick up steam in 2021. Oil production has recovered and like the overall economy, it does depend on the vaccine rollout around the world.”

According to Statistics Canada, capital spending in the oil and gas extraction sector is expected to be three-per-cent higher this year than in 2020, but will still be 31.5 per cent below where it was in 2019.

ATB anticipates the price for West Texas Intermediate (WTI) crude oil will average around $51 a barrel in 2021.

Other sectors of the economy which could see growth this year include the agriculture and tech industries as well as the construction and housing markets.