Alberta's economy to rebound, grow by 3.1% in 2010: Scotiabank
By Mario Toneguzzi
Calgary Herald
October 22, 2009
CALGARY - Alberta's economic recovery in 2010 will be bolstered by continued price appreciation for commodities, strengthening non-residential construction and buoyant infrastructure investments.
In a report released today, Scotiabank said the province will likely see a 3.1 per cent growth in GDP in 2010 following a 2.5 per cent loss this year during the economic recession.
The report said fixed capital investment amounts to almost 30 per cent of Alberta's GDP.
"Though the capital project base eroded considerably over the past year, a turnaround is already underway," said the report. "Lower construction costs, combined with favourable lending rates have put a number of projects back on track. The province has seen a multitude of oil and gas mergers and acquisitions — leading most jurisdictions in 2009 year-to-date — that have consolidated the industry and a number of projects.
"This trend is expected to continue into next year as foreign interest increases. A number of high profile energy projects will be gaining momentum going into 2010."
The report also said that housing construction has picked up in recent months, though the overall level of activity remains well short of activity in recent years.
"Crude oil exports should post a large rebound in 2010 as production increases and prices appreciate. However, a strong Canadian dollar will temper earnings," said Scotiabank. "While environmental concerns over the oilsands remain a top concern, an increase in public and private spending for carbon-capture sequestration projects is a positive sign.
"The province’s natural gas industry will likely experience a more difficult year as prices—though higher—are expected to hover around break-even levels for most of the province’s producers. The industry will be pressured by burgeoning shale plays in the United States and British Columbia and the province’s royalty and incentive frameworks will remain key issues."
Scotiabank also said manufacturing should rebound and the petrochemical industry has started to stabilize. Food manufacturers should also see some growth.
"The once overheated labour market is cooling down, but hours are being cut as opposed to widespread layoffs. Employment should improve next year with a service sector rebound and a modest recovery in drilling activity. Retail sales will likely show modest gains after a significant drop this year, as housing prices have stabilized and inflation pressures have moderated for the first time in years."
By Mario Toneguzzi
Calgary Herald
October 22, 2009
CALGARY - Alberta's economic recovery in 2010 will be bolstered by continued price appreciation for commodities, strengthening non-residential construction and buoyant infrastructure investments.
In a report released today, Scotiabank said the province will likely see a 3.1 per cent growth in GDP in 2010 following a 2.5 per cent loss this year during the economic recession.
The report said fixed capital investment amounts to almost 30 per cent of Alberta's GDP.
"Though the capital project base eroded considerably over the past year, a turnaround is already underway," said the report. "Lower construction costs, combined with favourable lending rates have put a number of projects back on track. The province has seen a multitude of oil and gas mergers and acquisitions — leading most jurisdictions in 2009 year-to-date — that have consolidated the industry and a number of projects.
"This trend is expected to continue into next year as foreign interest increases. A number of high profile energy projects will be gaining momentum going into 2010."
The report also said that housing construction has picked up in recent months, though the overall level of activity remains well short of activity in recent years.
"Crude oil exports should post a large rebound in 2010 as production increases and prices appreciate. However, a strong Canadian dollar will temper earnings," said Scotiabank. "While environmental concerns over the oilsands remain a top concern, an increase in public and private spending for carbon-capture sequestration projects is a positive sign.
"The province’s natural gas industry will likely experience a more difficult year as prices—though higher—are expected to hover around break-even levels for most of the province’s producers. The industry will be pressured by burgeoning shale plays in the United States and British Columbia and the province’s royalty and incentive frameworks will remain key issues."
Scotiabank also said manufacturing should rebound and the petrochemical industry has started to stabilize. Food manufacturers should also see some growth.
"The once overheated labour market is cooling down, but hours are being cut as opposed to widespread layoffs. Employment should improve next year with a service sector rebound and a modest recovery in drilling activity. Retail sales will likely show modest gains after a significant drop this year, as housing prices have stabilized and inflation pressures have moderated for the first time in years."
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