By David Opinko

Economy

Alberta entered “mild recession” in 2019: report

Feb 28, 2020 | 7:02 AM

Last year was not Alberta’s strongest from an economic standpoint, but things should improve somewhat in 2020.

According to a new report from the Conference Board of Canada, real GDP fell by 0.2 per cent compared to the year before.

“Difficult operating conditions in the energy sector led many oil and gas companies to slash their 2019 spending plans, deleverage debt, and focus on shoring up their financial positions”

Oil production was limited under a government-imposed cap.

“Where the Alberta outlook is not so bright is in government spending.”

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With various departments facing spending cuts, new hires will be limited, which the Conference Board believes will lead to layoffs.

“This public restraint will push the province’s unemployment rate up over the forecast despite job growth in the energy sector, as labour productivity in the public sector is about one-tenth of that in the oil and gas sector, where efficiency has been increasing substantially.”

It is not all bad news, however.

The group claims that business conditions in the energy sector are improving and oil and gas will once again be a driving force of the economy over the medium term.

Overall, Alberta’s real GDP is expected to grow by 2.2 per cent this year and 2.3 per cent next year.

“However, some of this improvement will be tempered by the impact of the provincial government’s austere fiscal agenda.”

The Government of Alberta is set to release its new budget Thursday afternoon.