More growth expected in city economy

MEDICINE HAT EXPECTED TO REBOUND

It’s “sunny days” for Lethbridge and Medicine Hat — and not just in the weather forecast.

The Conference Board of Canada is predicting steady economic growth for Lethbridge, and an economic rebound for Medicine Hat.

“Lethbridge’s diversified economy will continue to enjoy steady growth this year, with an anticipated 2.4 per cent rise in gross domestic product,” says board spokesperson Alan Arcand.

That’s after taking into account the soft market for beef, reflecting an oversupply globally.

“That said, output growth in the primary and utilities sector is forecast to average a decent 2.3 per cent annually this year and next.”

The city’s economy is “driven more by agriculture and food processing” than in other Alberta centres, Arcand notes, and it’s about to grow further with a $350-million potato processing plant planned by Cavendish Farms.

And Lethbridge’s services sector is expected to grow by 2.2 per cent over the coming year, he adds. Arcand predicts “solid gains in wholesale and retail trade, and in finance, insurance and real estate.”

Looking at local employment levels, Arcand says Lethbridge has added about 13,000 jobs over the last five years. He sees modest growth next year.

Employment fell over the last two years in Medicine Hat, he says, but now things are turning around.

“Medicine Hat is anticipated to post the strongest economic growth among the eight mid-sized cities” included in the Conference Board report. Other western cities included are Red Deer, Brandon and Prince George.

“Medicine Hat was hard hit by the oil price collapse,” says Arcand, with output falling in 2015 and 2016.

Now, “real GDP” is expected to grow 2.7 per cent this year with a further two per cent in 2018.

“Rising energy prices will drive output gains of 3.9 per cent in the primary and utilities industry, which includes oil and gas extraction.”

And that should “spark turnarounds in the manufacturing and transportation and warehousing industries this year and next.”

As a result, “Employment is poised to rebound this year following two straight annual declines.”

Weaker cattle as well as oil prices are also blamed for two slow years in Red Deer.

“The local construction sector was the hardest hit by the downturn in oil prices, as both residential and nonresidential investment dried up,” the report says.

That sector shrank by more than 17 per cent each year, contributing to an overall job loss of about 8.4 per cent in Red Deer last year.

But now investor confidence is starting to improve.

“The local economy will be on more solid footing this year and next with real GDP poised to rebound by two per cent this year and 2.2 per cent in 2018.”

Elsewhere across the west, Brandon is expected to see annual growth of about 1.9 per cent this year, up from 1.4 per cent in 2016. But after enjoying steady growth averaging 2.2 per cent since 2012, Prince George has slowed to a predicted 1.5 per cent rate this year.