ATB Financial recently provided an updated economic outlook on Alberta’s GDP growth. Thanks to a resurgence in the energy sector and the addition of over 200,000 new residents since the previous summer – an increase comparable to double the population of Red Deer – the province’s GDP growth projection for 2023 has been increased to 2.7%, a jump from the earlier 2.4% prediction.
This boost paints a promising picture for the current year, especially when recalling the past challenges Alberta faced, ranging from the oil price crash in 2014-15, market access issues in 2019, to the global pandemic in 2020. As ATB Financials’ chief economist, Mark Parsons, remarked, “Alberta’s economy has now firmly transitioned from recovery to expansion.”
Delving deeper into sectoral insights, the industrial construction segment is seeing an upswing. Stronger industrial construction activity is evident, with permits soaring to their highest since Q2 2019. This progress is bolstered by Alberta’s competitive industrial rents and a surging demand for distribution spaces. However, on the commercial front, permits remain stagnant. Office spaces report a stabilization but contend with high vacancy rates. Efforts are underway in Calgary to convert vacant offices into condos, with Edmonton contemplating a similar move.
However, the coming year might not be as strong. Persistent high interest rates have caused ATB Financial to adjust its 2024 growth forecast downwards, from 2.2% to just 2%. This cautious stance for the next year comes in the backdrop of several adversities Alberta grappled with in 2023, including wildfires, a strike at the B.C. port and drought conditions. Still, Premier Danielle Smith remains optimistic, labeling the recent report as “excellent news.” The 2025 forecast expects the economy to rebound to 2.6%.
You can read the full report on the ATB website.
