Solid increases in oil production, Fort McMurray rebuild will be the difference in Alberta this year
The Conference Board of Canada forecasts Alberta will see a 2.8 per cent growth in real GDP in 2017. (Larry MacDougal/Canadian Press)
In its winter quarterly report released Thursday, the board projects Alberta will lead the country in terms of real GDP growth in 2017, which is forecast at 2.8 per cent.
“The recent stability in oil prices has encouraged optimism that the worst is over, laying the foundation for a modest gradual recovery in capital spending in the energy sector,” the report said.
Oil prices are expected to remain low, which will hinder economic recovery and pull overall real GDP growth down to 1.9 per cent in 2018, the report says.
The OPEC factor
However, an agreement made between Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC countries in late 2016 to cut crude oil production by 1.8 million barrels per day supports a stronger price outlook for Alberta’s energy sector, the report says.
While OPEC restrains itself, Alberta’s output is forecast to increase, as new oilsands projects come online.
The price of crude oil is also expected to rise to almost $60 US by the end of 2018.
That energy sector recovery is good for the Canadian economy as a whole, according to Marie-Christine Bernard with the Conference Board.
“There was very weak growth for Canada as a whole in the last two years,” she said.
“The difficulties in the resource sector and in particular in the energy sector really hurt investment. That really pulled economic growth down in Canada to one and one-and-a-half per cent on average over the last two years.”
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