OTTAWA, May 14, 2015 /CNW/ - The sharp drop in oil prices will push Edmonton's economy into recession in 2015, with real gross domestic product expected to fall by 0.7 per cent in 2015, according to The Conference Board of Canada's Metropolitan Outlook: Spring 2015.
"This is a dramatic reversal of fortune for an economy that has benefited greatly from Alberta's energy boom. From 2010 to 2014, Edmonton's economy grew by an annual average rate of 6 per cent. But this year, the decline in oil prices is set to take its toll on Edmonton's economy," said Alan Arcand, Associate Director, Centre for Municipal Studies. "Edmonton's economy should bounce back next year as oil prices begin to recover, but growth will be limited to just 1.3 per cent."
- Hit hard by the slump in oil prices, Edmonton's economy is expected to shrink by 0.8 per cent in 2015.
- Edmonton's economy will begin to recover next year, but growth will be modest at 1.3 per cent.
- Aside from Calgary, Edmonton, Regina and Saskatoon, most of the 13 census metropolitan areas covered in the latest Metropolitan Outlook can expect improved economic growth this year.
- Toronto, Vancouver, and Halifax will be the fastest growing metropolitan economies in the country this year, with each posting gains of 3.1 per cent.
The dramatic fall in oil prices is bad news for the local energy sector in terms of both output and employment. The resources, agriculture and utilities sector is expected to contract by 1.8 per cent this year, while employment is forecast to shrink by 1.7 per cent.
Other sectors of the local economy will also feel the pinch of lower oil prices, with construction, transportation and warehousing, and wholesale and retail trade all set to decline this year. With output expected to plummet by 10.5 per cent this year, construction will be one of the hardest-hit industries due to weakness in both residential and non-residential investment. Meanwhile, weak job growth, slower income gains, and nervous consumers will cause wholesale and retail trade output to contract by 0.6 per cent.
Edmonton's labour market will also struggle this year, with job growth projected to reach just 0.7 per cent, its slowest pace since 2009. As a result, the unemployment rate is expected to increase from 5.1 per cent in 2014 to 5.9 per cent in 2015.
With the exception of Calgary, Edmonton, Regina, and Saskatoon, most of the 13 CMAs covered in the report will see their economic fortunes improve this year, boosted by, the lower prices for oil, a weaker Canadian dollar, and improvement in the U.S. economy. Toronto, Vancouver, and Halifax will be the fastest growing metropolitan economies in the country this year, with each posting gains of 3.1 per cent.
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SOURCE Conference Board of Canada
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