Employment rising, but ‘improvement’ slow: ATB outlook

With retail, employment and manufacturing on the rise in the province, ATB Financial’s latest economic outlook shows Alberta’s economy is still on the upswing. But the report says the trade dispute with the U.S. has business taking a “wait-and-see” approach.

Even with economic numbers remaining stable over the last three months, ATB chief economist Todd Hirsch says Albertans are still frustrated as the economic bounce-back is moving slower than most would like.

“There are still many people who are struggling, particularly those who are without work,” Hirsch said. “Employment has risen over the last year, but the rate of improvement has been slow and unsteady, with the quality of new jobs somewhat in doubt.”

The report says there were modest gains to employment in May and June, followed by a net loss of 3,600 jobs in July. Data shows there was a gain of 18,100 part-time positions in Alberta last month, but also a loss of 21,700 full-time jobs.

According to ATB, Alberta’s unemployment rate rose from 6.5 per cent in June to 6.7 per cent in July. ATB is forecasting the unemployment rate to average at 6.4 per cent this year and predicts that number will continue to drop over the next few years.

The report also shows wages and earnings in the province are on the rise and are creeping closer to pre-recession highs. Weekly earnings for Alberta employees in May reached $1,150 before taxes, about 15 per cent higher than the national average of $988 per week.

But Hirsch warned the trade dispute between Canada and the United States is causing Alberta businesses to take a cautious approach to foreign trade.

“Not only is NAFTA in danger, but U.S. trade relations with China, Mexico, the EU and Turkey have worsened significantly,” Hirsch said. “At this time, there is little clarity as to how bad conditions will get. If trade tensions worsen, a global slowdown is almost inevitable.”

Despite “good to excellent” growing conditions in much of the province, uncertainty around trade has increased instability in the agriculture industry as the price of canola dropped almost $30 per metric tonne and wheat prices jumped nine per cent from

There are still many people who are struggling, particularly those who are without work.

the previous year.

ATB is forecasting GDP growth of 2.6 per cent overall for 2018 and a growth of 2.2 per cent in 2019. ATB says the price of Alberta crude is expected to remain unchanged at an average US$42 per barrel as the price of West Texas Intermediate will settle at an average US$66.

And while steps forward on the Trans Mountain pipeline bode well for producers, the report says uncertainty over oil transportation infrastructure “continues to hang over Alberta’s oil industry” and is restraining energy investment and restraining market diversification.