Rising oil production makes Alberta fastest growing provincial economy in 2017

Alberta Oil sands. Shell photo.

Most provinces will see positive economic growth in 2017, Alberta to lead growth

Alberta is poised to have the strongest economic growth in 2017 mainly due to fast-rising oil production, according to The Conference Board of Canada’s Provincial Outlook: Winter 2017.

Former leaders, British Columbia and Ontario, will see the pace of economic growth ease this year, but they will still deliver a solid performance.

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“Following two tough years stemming from widespread weakness in the energy sector, Alberta’s economy finds itself with the strongest economic growth this year,” said Marie-Christine Bernard, Associate Director, Provincial Forecast, The Conference Board of Canada.

“Along with a big increase in oil production, some of the growth in Alberta will come from the rebuilding efforts in Fort McMurray. However, we expect more subdued economic growth next year as oil prices are not expected to increase very much. Beyond Alberta, all provinces are forecast to see positive economic growth in 2017, with the exception of Newfoundland and Labrador.”

Highlights

• Alberta’s real GDP is forecast to grow by 2.8 per cent this year, the fastest among the provinces.
• All provinces are expected to see positive economic growth this year, with the exception of Newfoundland and Labrador.
• Last year’s leaders, British Columbia and Ontario, will see their economic growth lose some momentum in 2017 but they will still deliver moderate expansion.

Alberta

Alberta’s real GDP (gross domestic product) is forecast to grow by 2.8 per cent this year, the fastest among the provinces, with 0.4 percentage point coming from the rebuilding efforts in Fort McMurray.

Also contributing to the province’s growth is a more stable outlook for the energy sector following the recent OPEC agreement to cut oil production, which will allow oil prices to average almost US$60 a barrel for the West Texas Intermediate by the end of 2018.

Although investment in the energy sector will not be increasing at a fast pace, total exports are expected to increase this year due to robust oil production gains as new oil sands projects come online.

Another positive development for Alberta down the road is the federal government’s conditional approval of the Enbridge Line 3 Replacement project and Kinder Morgan pipeline.