The Alberta economy will grow this year, but only at about half the rate it did last year, ATB Financial chief economist Todd Hirsch told an audience in Olds.
But on the bright side, Hirsch believes that slower rate will be more sustainable and dependable.
Speaking during the PowerUp! Entrepreneurs Conference at the Pomeroy Inn & Suites Nov. 6, Hirsch said ATB will be releasing its fall Alberta economic update on Nov. 23. However, he gave the approximately 100 people in the room an idea of what it will contain.
"It's our sense that 2018 actually does represent a bit of a slowdown from 2017," Hirsch said.
"Now that's discouraging news, because we actually want things to be rounding back up, you know, to around five or six per cent GDP growth. That's what we were experiencing in the first half of the decade.
"Then two nasty years of recession came. Now coming out of recession, we are looking at more moderate rates of growth, but a slower rate of growth, probably around two or two-and-a-half per cent this year.
"That feels sluggish, because it's not a fast enough growth rate to get the unemployment rate down very quickly. And that is the tough part of this recovery," he added.
In fact, Hirsch said, he dislikes using the world "recovery" because he says the province is entering new territory economically.
"Recovery really just means you're going back to where you were. That's what happened in 2009 and 2010," he said.
"2017 and 2018 and going into 2019 is less of a recovery and more of what I would describe as an evolution. We're morphing into a different province. The composition of the labour market is changing.
"Like it or not, we are becoming less dependent on the energy sector because the energy sector has kind of flatlined -- for a lot of complicated reasons, a lot of them having to do with pipeline access and different things.
"But the energy sector has more or less flatlined. It's not in decline, but it's not a growth engine.
He predicted that this year and next year, growth will primarily take place in the following sectors: agriculture/agrifoods tourism, the tech sector and transportation and logistics.
"Those are the sectors that we think actually offer a lot of growth possibilities. And not even in the future. They're already showing growth potential right now," Hirsch said.
"The problem is, those sectors, even as a group, are much smaller than the energy sector."
Unfortunately, he said, while these smaller sectors are picking up the "baton of growth," they don't create as many jobs as quickly as the resource sector has in the boom times.
"The baton of growth is being picked up by these smaller sectors producing moderate growth in the province but a growth rate that, you know, admittedly feels a bit discouraging to Albertans because that job creation is a slow grind," Hirsch said.
"My belief is that a slower, more steady rate of growth, even though it feels frustrating, is actually a better, healthier place to be because it prepares us for a more stable, diversified economy in the future.
"Just think of the tortoise and the hare; who wins the race in that one?" he asked.
