Robust oilsands investment a key
CALGARY – Alberta’s economy continues to lead the pack across a range of indicators and solid growth will persist in 2013, supported by robust oilsands investment, says Scotiabank’s Global Forecast.
The bank is forecasting the province will lead Canadian economic growth with 3.4 per cent this year followed by 3.0 per cent in 2013.
Employment growth of 3.1 per cent this year and 1.7 per cent in 2013 will also be the best in the country, according to the report.
Warren Jestin, senior vice-president and chief economist with Scotiabank, is in Calgary this week presenting his outlook on the economy.
On Tuesday, Jestin will be discussing the economy at an economic outlook put on by the Calgary Chamber of Commerce. Then on Wednesday, he will be making a presentation on the economy at the annual Calgary Real Estate Forum.
“Well certainly there should be more smiles in Alberta than almost any other place in the country,” said Jestin on Monday.
“Much of that is driven by the ongoing infrastructural projects. We’ve now got demographics that are very, very favorable here.”
“Infrastructural investments remain strong and in fact I think Alberta’s growth may well be supply constrained. You just don’t have the skills or the infrastructure in order to push it ahead as fas as it otherwise would be. For this year, next year and probably into 2014 the odds are very, very strong that Alberta will lead the pack by a very substantial margin.”
Despite some global issues, economic growth in places like China, is good news for Alberta and “amazingly supportive for the commodities sector,” added Jestin.
While Alberta’s economy continues to be a shining light, concerns remain about the global situation which continues to under perform, said the Scotiabank report.
“First, recessionary conditions in the eurozone persist, reinforced by intensifying fiscal austerity and rising unemployment. Weakness is becoming more evident in the larger economies ... Second, U.S. business activity is being undermined by the intensifying problems around the world ... Third, the sharper-than-expected slowdowns in the faster-growing emerging economies of China, India and Brazil have yet to bottom out,” said the report.
“And fourth, even countries with better underlying fundamentals such as Canada, Australia, South Korea, and many of the core members of the euro zone, are being side-swiped by the fallout from reduced global demand.”
Meanwhile, the Conference Board of Canada said Monday that Canada’s domestic economy has softened and its major trade partners are too weak to pick up the slack, limiting growth in GDP to less than two per cent this year.
Canada’s real GDP growth will slow to 1.8 per cent this year, while growth of 2.3 per cent is forecast in 2013, said the board’s Canadian Outlook, Autumn 2012. If a further European sovereign debt crisis can be avoided, or at least contained — and if the U.S. begins to address its fiscal deficit seriously – Canada’s economy is expected to achieve growth of 2.6 per cent in 2014, it said.
“The influence of a grim global environment, coupled with a heavy dose of fiscal restraint, will result in Canada’s economy muddling along through the rest of this year and into 2013,“ said Pedro Antunes, Director, National and Provincial Forecast.
“The swift post-recession rebound that occurred in 2010 and 2011, driven by a strong domestic economy, has mostly expired through the first half of this year. Recurring crises stemming from the euro zone, along with some false starts from the U.S. economy, have eroded consumer confidence and slowed business investment and job creation.”