Oil-rich Alberta shows early signs of economic recovery

Economic outlook still mixed, with gains in non-energy exports offset by a slight increase in the forecast for unemployment.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |  Aug. 24, 2017 at 6:46 AM
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Aug. 24 (UPI) -- The provincial economy in oil-rich Alberta is expected to grow faster than expected, though some metrics paint a mixed picture of the recovery, data show.

The provincial government forecast growth in terms of gross domestic product for 2017 at 3.1 percent, up from the budget forecast of 2.65 percent. With a push for diversification under way, non-energy exports were up 7.1 percent in the first half of the year.

"There is good reason to feel optimistic about Alberta's recovery and we will continue on the path to balance while supporting the needs of everyday Albertans," provincial Finance Minister Joe Ceci said in a statement.

In an annual review from earlier this year, the government said the economy bottomed out in the middle of 2016. More than 40,000 full-time jobs were added to Alberta's economy between July 2016 and March and the government said the weighted average of nine monthly indicators showed expansion accelerated from May 2016 to March.

Ceci in February said the government was forecasting on the assumption of crude oil prices of $48 per barrel. The latest budget forecast for 2017 shows an estimate for the price of West Texas Intermediate, the U.S. benchmark for the price of oil, at $55 per barrel, about 14 percent higher than the level from early Thursday.

Ceci's forecast comes as U.S. and Canadian officials review the terms of the 23-year-old North American Free Trade Agreement. Canada counts on the United States as its top trading partner and is the top oil exporter to its southern neighbor, and three oil and gas trade groups in North America said in a joint policy paper that "any changes" to the trilateral trade agreement put energy markets at risk.

The provincial finance ministry said some of the impacts from lower crude oil prices, which are about half what they were three years ago, were persistent. Alberta's government is expecting less revenue, higher unemployment and higher total expenses.

Alberta's economy was hammered last year by the dual strains from lower crude oil prices and wildfires that swept through the heart of the provincial oil sector. About 1 million barrels of oil per day were sidelined by fires centered in the Fort McMurray region.

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