CALGARY — Alberta’s economy was hit by a rare combination of negative factors, but recovery is on the horizon, according to a new report from Canada West Foundation.
Written by the foundation’s senior economist Jacques Marcil, “A Rough Patch: Alberta Economic Profile and Forecast” says that while oil prices have begun to recover, lower employment, reduced investment and a still-struggling global economy mean that the news is more bad than good.
According to Marcil, this downturn is an anomaly in Alberta’s history: the combination of low energy prices and global recession.
“Alberta is being hit harder than in previous recessions,” says Marcil. “In past economic slowdowns, either the energy industry kept Alberta growing while the national economy was struggling, or the energy industry took a hit while the national economy stayed the same. The one-two punch of global recession and plunging energy prices mean that Alberta will be hit worse than the rest of Canada this year.”
Economists are cautiously predicting the U.S., the largest market for the Alberta energy industry, will begin to recover in 2010. And according to Marcil, a recovery stateside will be an important first step towards economic recovery in Alberta.
“Many signs point to a rebound in energy prices, which will be of great benefit to Albertans,” says Marcil. “However, last year’s contraction, the first since 1986, came as a bit of a shock to them.”
To download a copy of A Rough Patch, click here.
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