OTTAWA — Economic growth is set to moderate in Edmonton for 2018 with the city expanding by 2.2 per cent, according to The Conference Board of Canada’s Metropolitan Outlook: Winter 2018.
Edmonton’s economy benefitted in 2018 from higher oil prices and stronger investment and drilling plans in the oil patch, but real GDP growth is poised to moderate this year. Following a vigorous advance of 5.2 per cent in 2017, real GDP growth is forecast to cool to 2.2 per cent this year.
Oil prices are expected to continue their gradual rise, helping output growth reach 2.5 per cent in the primary and utilities industry this year, down sharply from a 12.2 per cent gain in 2017. Edmonton’s manufacturing sector, which is closely tied to the energy sector, also rebounded last year with 7.9 per cent output growth and is expected to experience further growth of 2.8 per cent this year.
The bounce back in energy investment also helped local construction output growth reach 6.0 per cent last year. This year, construction output is forecast to climb by a modest 1.8 per cent.
While the downtown core remains busy with many major construction projects, a significant increase in office inventory has caused office vacancy rates to surge, dissuading developers from breaking ground on new projects. On the residential front, builders are expected to remain cautious and housing starts are expected to drop for the second time in three years in 2018.
Unfortunately, last year’s big economic turnaround failed to provide a jolt to Edmonton’s job market. After a flat reading in 2016, employment edged up by less than half a per cent in 2017. However, hiring should finally start picking up this year, with job growth forecast to reach 1.0 per cent.
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