ATB Chief Economist Mark Parsons speaking at the Growing the North Conference. Photo by Curtis Galbraith.

By Curtis Galbraith

Economy

ATB Chief Economist expects economic growth to slow in Alberta, but will still be better off than the rest of Canada

Feb 28, 2024 | 12:00 PM

The Chief Economist at ATB is predicting the Alberta economy will slow a little bit this year, but will still do better than the rest of Canada.

Mark Parsons says there are three reasons for this.

“One is, we’re getting in-flows of migrants from the rest of the country, international migration, so really, really strong population growth, in part because people are coming for affordable housing, but also jobs.”

“Second, the energy sector. We think that oil and gas investment will increase with TMX (the Trans Mountain Pipeline) coming on line (in the) second half of this year and production rising.”

The third reason is growth in emerging areas like hydrogen, biofuels and petrochemicals.

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Parsons is forecasting 2.1 per cent GDP growth this year and 2.7 per cent in 2025, while the rest of the country can expect growth around 1 per cent.

He adds another issue is a lack of housing and of skilled people to build homes.

“A lot of construction vacancies, that’s the industry with the highest vacancies outside of food and accommodation, and so that sector has been hit with higher interest rates, rising construction costs and now, labour shortages.”

Parsons thinks migration may help fill some of those vacancies.

Parsons also says Grande Prairie being a regional service centre, plus a lot of natural resources, means there are a lot of economic opportunities in this region.

“We see a lot of opportunity on the natural gas side with the Foothills region being a major producer and continuing to increase production, especially with LNG Canada coming on line in 2025. That’s going to support takeaway capacity (and) natural gas prices.”

Parsons says there is potential for what he calls “major projects” in hydrogen and petrochemicals.

He says agriculture is also a potential area of growth.

“(There is) some uncertainty right now with potential drought conditions going into this next crop season. At least last year, (this) region fared relatively well compared with the rest of the province.

Parsons says another advantage for the Peace is a young, skilled workforce, a population that will still be much younger than the rest of Canada by 2050.

He also says there is a growing service sector in this area.

Parsons was one of the speakers at the recent Growing the North Conference.