Alberta is on track to become a nation-beater again 

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Alberta has taken its share of knocks recently.

A catastrophic water main rupture has put Calgary on water restrictions for weeks and crews are scrambling to get the road operating earlier than the Stampede begins July 5.

The turmoil comes amid an economic system that has fallen wanting expectations.

Normally a nation beater, Alberta ranked in the course of the pack in 2023 with progress in gross home product at 1.5 per cent, dragged down by declines in building and agriculture and a weaker-than-expected efficiency by the energy sector.

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But brighter days are forward, economists predict.

Oil production is on track for its strongest yr since 2018 now that the Trans Mountain Pipeline extension has been accomplished, says TD Economics in its provincial forecast.

“Our forecast for a 300k/bpd increase in Alberta’s oil supply growth is a major contributing factor to Canada’s expected success as a global swing producer this year,” stated the report.

The further capability has additionally boosted the worth of Alberta oil, Western Canadian Select, and TD’s forecast of simply US$13 a barrel under West Texas Intermediate‘s US$80 could boost the province’s income past projections.

TD expects Alberta will return to the higher finish of the provincial progress chart with 1.9 per cent actual GDP progress this yr and 1.9 per cent subsequent.

Deloitte Canada’s forecast is much more optimistic.

“The Alberta economy is benefiting from a population surge as Canadians from other provinces flock to Wild Rose Country is search of a lower cost of living,” stated Deloitte in its provincial forecast.

“That and the opening of the Trans Mountain pipeline expansion will keep Alberta growing above the national average, with GDP gaining 1.5 per cent this year and 3.3 per cent next year.”

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Saskatchewan is not far behind. This province beat Alberta final yr with 1.6 per cent progress as its building sector grew on the quickest tempo in 15 years, stated TD.

Potash, which has become the province’s primary export, is a driving pressure. Construction of Phase 1 of the Jansen potash mine is bringing funding and jobs into the province and potash manufacturing has ramped up this yr, stated TD.

The unemployment price right here has been the bottom within the nation and inexpensive housing costs have helped shelter residents from the impression of upper rates of interest and supported client spending.

TD forecasts the province’s actual GDP will develop 1.7 per cent this yr and 1.7 per cent subsequent.

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Canada’s economic growth perked up a bit in April, however an early estimate from Statistics Canada suggests the rebound was short-lived.

GDP grew by 0.3 per cent in April from March however that progress is estimated to have slowed to 0.1 per cent in May.

If that prediction comes true, economists anticipate the economic system to develop 1.8 per cent yr over yr within the second quarter, barely above the Bank of Canada‘s forecast in April.

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However, because Canada’s inhabitants is nonetheless rising quicker than the economic system, GDP per capita (or per particular person) is nonetheless falling, stated CIBC Capital Markets economist Andrew Grantham.

This week’s employment knowledge and July’s inflation numbers will probably be extra vital in figuring out whether or not the Bank of Canada will reduce interest rates at its July assembly, stated Grantham.

• U.S. Federal Reserve Chair Jerome Powell joins a coverage panel on the European Central Bank Forum on central banking in Sintra, Portugal
• Real property boards for a few of Canada’s greatest cities will launch their residence gross sales figures for June this week. The Calgary Real Estate Board is anticipated to launch residence gross sales at present, whereas Vancouver is anticipated on Wednesday. Home gross sales for Toronto are anticipated on Thursday.

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Today’s Posthaste was written by Pamela Heaven, with further reporting from Financial Post employees, The Canadian Press and Bloomberg.

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