Alberta has said goodbye to a two-year recession, but it will likely be a few years before a stronger and more resilient economy emerges, according to a report from ATB Financial released Thursday.
The Edmonton-based financial institution latest Alberta economic outlook forecasts that the province will enjoy real gross domestic product (GDP) growth of 3.2% this year, as it rebounds from an extended downturn sparked by a prolonged drop in oil prices.
"There is little question that Alberta's economy has rounded the corner and the worst recession in three decades is now squarely in the rear-view mirror," the report says.
Looking ahead to 2018, however, the report forecasts growth to slow to 2.1%.
"The major challenge remains the energy sector and the stubbornness with which the benchmark price of oil remains below US$50 per barrel. At those levels, Alberta's energy sector struggles," the report adds.
At current levels, the energy sector will be stable, but not a strong driver of growth in 2017, the report notes. In the meantime, the economy is receiving contributions from various other sectors including agriculture, food processing, tourism, retail and manufacturing.
The economy has added around 35,000 jobs over the past 12 months, according to the report, but these tend to be lower-paying, service sector jobs.
"Most of the high-paying professional jobs in the energy sector have been slow to return. And the private sector overall has lagged the public sector in job creation," the report says.
"Alberta's economy is recovering, but it is not returning to what it looked like in 2014. Instead, the economy is evolving into one that is more diversified, and more typical of other Canadian provinces. It is a slow process and it may be a few more years before we see a full economic recovery," says Todd Hirsch, chief economist at ATB, in a statement.
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