During a recent stop in Grande Prairie ATB Chief Economist Todd Hirsch talked about recovering versus evolving. He says Albertans need to evolve and adapt to the new economy that we are living in. Hirsch says there’s a lot of discouragement because naturally people want things to go back to the way they used to be.
“We are evolving in to something new. I think something that in the long run will be more sustainable, more stable, less volatile, less prone to the ups and downs. But it is going to take a little while for us to get there.”
Hirsch saw growth in four sectors in particular that he thought will help the province in the future. He says agriculture and agri-food is one the Peace Region could really benefit from.
“Agri-foods or food and beverage manufacturing has now surpassed refined petroleum in terms of value of production and that’s going to continue to grow.”
Transportation and logistics is another area Hirsch sees growth in. That’s also a compliment to the growth that Hirsch sees in the tech sector he says is like “a thousand pinpoints of light around the province.”
“So far we are lacking a major concentration or kind of a centre of gravity of it. But there’s a lot of tech companies in Alberta doing amazing things and I think they are going to have a lot of opportunities in the next three to five years.”
Tourism is another area that has seen growth. It is about 1/40 the size of the energy industry in Alberta. Hirsch says it works to counterbalance the downturns in oil and gas.
“When oil prices come crashing down like they did in 2014 and 15 the Canadian dollar went from par back down to about 74 cents. That really helps tourism in Canada. It brings those American visitors and it also lowers transportation costs. That’s what we like to see in a diversified economy. A bunch of different industries that run counter to each other.”
Overall Hirsch expects to see 2.8 per cent real GDP in 2018. He says it’s a slower rate of growth than what Alberta experienced between 2010 and 2014 when growth was 4.5 to 5 per cent a year.
“People got used to that really rapid pace of growth. Now we are moving in to a period where growth is going to be more moderate but eventually, more stable and healthier.”
Hirsch believes this helps to explain some of the lingering discouragement around Alberta. He noted as he travels around the indicators are all up but there is a disconnect between the data and the mood.