As the economy of Canada’s wealthiest province continues to improve, many wonder whether it is a recovery built to last. In this report, we will talk about what we expect to see happen in Alberta over the next year.
Let’s dive right into the details.
Continued increase in global oil demand, geopolitics will buoy prices
After several years of an artificial oil glut created by the Saudis opening up their production to full capacity, they have backed off after failing to kill off higher cost competitors. This, combined with the continuing increase in global oil demand and tensions in the Middle East has created the conditions needed to to rally oil prices as high as $75 earlier this year.
At minimum, we expect the current reality of the market to keep prices stable if they don’t continue the orderly ascent they have been on over the past 12 months. This will increase corporate profits, make costlier plays economical, and fill the coffers of the provincial government with greater volumes of resource revenue.
As a result of this effects, more business investment in equipment and infrastructure, and a continued increase in employment in the oil and gas sector is expected over the course of the next year.
With some of the best paid workers in Canada, this is excellent news for the broader economy of Alberta and Canada as a whole, as disposable income of ordinary people expected to sharply increase. They will take this money and spend it everywhere from the local microbrewery to the malls.
Online businesses such as e-commerce stores and online gaming sites are expected to benefit as well. If you are among the latter group and you end up landing an oil job later this year, here is a list of sites who accept idebit deposits. No matter whether your game is poker, blackjack, or slots, we wish you nothing but the best on the virtual felt!
A potential U.S. recession looms
While indicators have been mostly positive in Alberta over the past year, trouble may be brewing if predictions by some mainstream economists come to pass. With more than a decade of continuous growth, rising interest rates, an expanding trade war with Canada, the EU, and other nations, and an overheating housing market south of the border, many feel that an economic shock will soon send America into a recession.
How this impacts Alberta will depend on how hard a fall the USA takes. If it is a mild cold like the dot com recession of 2001, it will cause a brief pause in growth in this province. If it is a repeat of the Great Recession of 2007-2009, though, the global price of oil will tumble, dragging our economy down with it.
The 2019 provincial election will also play a big role
The year ahead will be an important one politically, as Albertans will head to the polls to vote for their favourite representatives. The party that prevails will play a significant role in the direction the economy heads from June 2019 onwards.
If the NDP loses to the UCP as many polls predict, their Keynesian policies will almost certainly be halted, causing losses in infrastructure spending. Severe cuts to government institutions would slow the ongoing recovery, and would lead to a considerable increase in Edmonton’s unemployment rate.
On the other hand, action taken to dramatically cut the debt could lead to an improvement in the province’s credit rating, which is one notch below the best possible grade. Taxes would also be decreased for those making more than $150,000 per year, leading to a boost in the sales of luxury goods.Read More