Fears that the oil industry’s decline would drag Alberta into recession are not shared by the Royal Bank of Canada.
Fears that the oil industry’s decline would drag Alberta into recession are not shared by the Royal Bank of Canada. A report by senior economist Robert Hogue says that although there is likely to be a dramatic slow down for the province there will still be growth. That growth though will be sharply lower than the RBC prediction made in December when it expected GDP to grow by 2.7 per cent, down from the 4.1 per cent of 2014. This latest report suggests an even slower 0.6 per cent growth for 2015. Hogue says the cut in capital investment by the oil industry will impact employment, consumer spending, migration and the housing market. While confidence may be the issue for real estate in Alberta now it will be lower population growth that is the bigger factor Hogue’s report predicts. He sees home resales declining by 16 per cent this year with housing starts down to 27,500 from last year’s 40,600. There is more optimism on prices though with the report suggesting a drop of just 0.5 per cent across the province. Read the full story.
