Edmonton-based ATB Financial has downgraded its growth forecast for Alberta, as the province’s economy faces numerous challenges.
The financial institution’s latest monthly economic outlook forecasts growth of 0.7% this year, which represents a 50% decrease since March, when growth was forecasted at 1.4%.
While the province doesn’t expect a recession, “it is going to feel slow in our province,” said Todd Hirsch, ATB’s chief economist, in a release.
The report’s key findings include slow growth in jobs and retail sales, a slowing and uncertain global economy, and continued pipeline challenges.
Though insufficient pipeline capacity is the overriding issue facing the oil and gas sector, the sector faces other challenges such as soft natural gas prices and tepid capital investment, the report said.
The sector provides more than one-quarter of Alberta’s real GDP.
Some encouraging sectors include agriculture and agrifoods, both of which should perform well, though canola growers have been hit by a Chinese import ban. Cannabis and other niche crops are creating new opportunities.
Also, manufacturing sales started the year on a stronger note and are expected to perform relatively well going forward across most sub-sectors.
For 2020, ATB forecasts Alberta’s growth to be 1.6%.
For more details, read the ATB Financial economic outlook.