Retail/Consumer Confidence
Despite a break at the pump, ATB Financial senior economist Todd Hirsch warns of a chill in consumer confidence.
“Most everybody in this province, we’re either directly or indirectly employed by the energy sector,” Hirsch said. “If prices stay where they are or lower well into 2015, it will shake the nerves of some people.”
News or rumours about layoffs will convince consumers to tighten spending.
“Then retailers do suffer and then there are layoffs — it all kind of spirals downward.”
Others may put off buying big-ticket items like vehicles and houses, thinking it may be cheaper a year from now.
ATB’s official forecast for 2015 will come out in early January. Hirsch expects it will call for Alberta’s growth to be in the range of two to three per cent, down from the 3.6-per-cent 2015 growth ATB projected in October.
“Even if we perform at 2.5 per cent, we’ll still outperform the national average,” he said. “But it will feel slow, there’s no question.”
According to RBC Economics, a negative spillover into non-energy sectors hasn’t materialized because “boom-like conditions continue to prevail across the province and attract a large number of people to move to Alberta.”
The bank said “positive demographics” and tight job markets are sustaining solid consumer demand with impressive housing market gains and strong retail sales in the second half of 2014.
“We expect that such strength will diminish somewhat in 2015 due to the pressures that lower oil prices will exert on incomes … .”