Alberta’s economic recession, precipitated by the oil crash of 2014, may finally be nearing its end as the market may rebalance this year. The Conference Board of Canada predicts that the province will have the country’s strongest economic growth in 2017 due to fast-rising oil production; Alberta’s GDP is anticipated to grow by 2.8% in 2017 as a result of OPEC’s agreement to cut oil production, “which will allow oil prices to average almost $60 USD a barrel for the West Texas Intermediate by the end of 2018.”
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Additionally, the Conference Board of Canada’s winter quarterly report notes that the province will likely see “a modest, gradual recovery in capital spending in the energy sector.” The Royal Bank of Canada also expects oil to help Alberta’s economy this year, with the recovery accelerating in 2018 (with estimated growth hitting 3.3%). Add to these predictions that the provincial government expects a positive economic outlook for 2017 driven by the province’s oil and gas industry, and the economy is certainly looking up for Alberta oil and gas. With the continued improvement in oil prices, Alberta’s exports are anticipated to increase significantly this year – an improvement that’s boosted manufacturing and non-conventional oil production. Not to mention that drilling has recovered substantially since 2015 and is expected to increase conventional investment. However, despite these positive turns, private sector construction has taken a downturn, with major projects winding down.
While the outlook is good for Alberta industry, the growth isn’t expected to produce many new jobs. Rather, the growth merely illustrates a rebound from rock bottom not a return to the province’s glory days. ATB’s Chief Economist, Todd Hirsch, says it’s not necessarily a jobless recovery, but that “the nature of the jobs are changing.” Basically, old jobs might not come back but new jobs in other sectors will offer opportunities. The oil and gas sector only anticipates the recovery of about 3,400 jobs over the next four years.
Alberta’s Industrial Heartland Association says there is an “unmatched opportunity for investment and growth in the petrochemical sector. This could result in thousands of new jobs, billions in GDP, and new sources of corporate taxes.” As the province works to diversify our oil and gas industry and increase the value of Alberta’s energy resources, a boost in the private sector’s construction will be a boon for the economy. Now, is the time to act for those wanting to invest in gas station construction in Alberta.
