After a year marked by stagnant growth and weak job numbers, Edmonton will see “sluggish” growth in 2020, says the city’s chief economist.
“We’re coming off a very difficult year in 2019 and we’ve seen significant weakness in several key areas,” John Rose said in an interview Thursday with CBC Radio’s Edmonton AM.
“I think people really have to manage their expectations. Growth rates are going to be very, very modest.”
Edmonton’s economy is comparatively diverse, said Rose. Less reliant on the energy sector than other Alberta cities, the provincial capital has been surprisingly resilient. However, the prolonged slowdown is starting to bear down on Edmonton businesses, he said.
‘Rather low’
Growth in Edmonton’s real gross domestic product (GDP) hovered around 0.5 per cent in 2019, the lowest it’s been since 2015, soon after oil prices started to plunge.
There will be some growth in the coming year, Rose said. But it will be slight and lopsided, favouring sectors less intertwined with the energy sector.
He expects Edmonton’s GDP will increase by about 1.4 per cent in 2020 and 2.5 per cent in 2021.
Rose says Albertans shouldn’t expect a boom but a modest economic recovery. (CBC)
The local economy is in recovery mode and the labour market continues to tighten, shaking consumer confidence and muting investment.
In November, as Alberta lost 18,000 jobs, the unemployment rate in Edmonton climbed to 7.7 per cent. Rose estimates 11,000 positions were lost in both full-time and part-time work in Edmonton during the year.
“What we’ll see is a very modest acceleration in growth,” he said. “People will feel it but it will be very modest. We’re talking about 1.3 or 1.5 per cent growth in 2020.
“Historically, that’s rather low, but nonetheless it will be much better than 2019 where we were stuck at 0.5 during a very, very weak year.”
Oil prices are likely to remain volatile and activity in the energy sector will be muted, undercutting growth in manufacturing, construction, logistics and professional services.
“We’re not going to see a really robust consumer side of the economy. We’re not going to see a very robust residential construction sector,” Rose said.
“It’s going to be sluggish, unfortunately.”
We’ll do reasonably well in Edmonton but there will be no boom.– John Rose
The latest report from ATB Financial, released in December, provides similarly stunted projections for the Alberta economy.
According to ATB, provincial GDP growth in 2019 was 0.4 per cent — well below the 20-year average of 2.8 per cent.
ATB anticipates a slightly better 2020, with growth of 0.9 per cent leading to a better 2021, with GDP forecast to grow by 2.1 per cent.
The energy sector is stuck in “slow mode,” Rose said.
“I’ve been at this now 10 years and I’ve been waiting for the Trans Mountain Pipeline [expansion] and Line 3 and the Keystone XL to hit and none of that has happened,” he said.
“When I see it, I’ll believe it. Right now, I’m not making any assumption about a sustained expansion on the energy side of the Alberta economy.
“We’ll do reasonably well in Edmonton but there will be no boom.”
OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.
However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.
The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.
Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.
The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.
The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.
This report by The Canadian Press was first published Oct. 17, 2024.
OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.
In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.
The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.
Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.
In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.
It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.
This report by The Canadian Press was first published Oct 16, 2024.
OTTAWA – Statistics Canada says manufacturing sales in August fell to their lowest level since January 2022 as sales in the primary metal and petroleum and coal product subsectors fell.
The agency says manufacturing sales fell 1.3 per cent to $69.4 billion in August, after rising 1.1 per cent in July.
The drop came as sales in the primary metal subsector dropped 6.4 per cent to $5.3 billion in August, on lower prices and lower volumes.
Sales in the petroleum and coal product subsector fell 3.7 per cent to $7.8 billion in August on lower prices.
Meanwhile, sales of aerospace products and parts rose 7.3 per cent to $2.7 billion in August and wood product sales increased 3.8 per cent to $3.1 billion.
Overall manufacturing sales in constant dollars fell 0.8 per cent in August.
This report by The Canadian Press was first published Oct. 16, 2024.
