Do not feed the fears — that was the bottom line message on Alberta’s economy, delivered by ATB economist Todd Hirsch to a gathering of residential construction executives last week.
“I think that when we’re dealing with an economy that’s moving into a rough patch, sometimes we are in danger of falling into this ‘already-living-in-a-recession mentality’ when a recession isn’t even a foregone conclusion,” said Hirsch.
“Some of us are already living in the worst of times, the worst-case scenarios that can possibly happen and very quickly that builds into our mentality and does nothing positive in terms of moving the economy forward.”
Certainly, Hirsch was not down-playing the current state of Alberta’s energy sector.
“I’m not saying we should ignore what’s going on, we need to pay attention to what’s going on and 2015 is going to be a challenging year for Alberta’s economy,” he said.
“We need to make prudent decisions (in fact) prudent decisions should always be in style and I don’t know if they always are when oil’s at $107 a barrel, but we will need to make some very tough, very prudent choices in 2015 and I’m not saying we should ignore this, but I don’t think Albertans should worry about the economy (because) worry doesn’t get you anywhere.”
Hirsch suggested there is too much focus on oil and gas in Alberta, while ignoring industries that are strong and expected to get stronger.
“Alberta’s second, third and fourth largest industries — forestry, agriculture and tourism — are all probably set to have record-setting years in 2015,” he said. “They all do really well with low fuel prices and they really benefit from a 79- or 80-cent Canadian dollar and, particularly in the case of forestry, they benefit from the availability of labour that they compete for with oil and gas.
“In 2015, those forestry producers in northwestern Alberta are going to see some nice, juicy resumes coming through the door. Lumber panel board prices are close to record highs, the U.S. housing market is surging back (so) all the planets are aligning in the right way for forestry in2015.”
ATB’s next provincial economic forecast will call for limited growth in Alberta.
“I still see no compelling evidence to say that Alberta’s going to be in recession and contraction. I know there have been a couple of other forecast groups that have now dropped a negative sign in front of their digit for Alberta (but) we’re still calling for very modest growth (in our upcoming forecast),” said Hirsch. “But 2015, no matter how you slice it or dice it, is going to be a weak year for growth and we need to anticipate that.”
Hirsch channelled U.S. President Franklin D. Roosevelt’s speech after the attack on Pearl Harbor in 1941.
“The biggest threat to Alberta’s economy in 2015 is not $46 oil, the biggest threat is fear. Once fear takes root, then you make irrational decisions and irrational decision-making has a way of bringing everything down under its own weight,” said Hirsch. “I ask you all to not feed the fears
“I think that when we’re dealing with an economy that’s moving into a rough patch, sometimes we are in danger of falling into this ‘already-living-in-a-recession mentality’ when a recession isn’t even a foregone conclusion,” said Hirsch.
“Some of us are already living in the worst of times, the worst-case scenarios that can possibly happen and very quickly that builds into our mentality and does nothing positive in terms of moving the economy forward.”
Certainly, Hirsch was not down-playing the current state of Alberta’s energy sector.
“I’m not saying we should ignore what’s going on, we need to pay attention to what’s going on and 2015 is going to be a challenging year for Alberta’s economy,” he said.
“We need to make prudent decisions (in fact) prudent decisions should always be in style and I don’t know if they always are when oil’s at $107 a barrel, but we will need to make some very tough, very prudent choices in 2015 and I’m not saying we should ignore this, but I don’t think Albertans should worry about the economy (because) worry doesn’t get you anywhere.”
Hirsch suggested there is too much focus on oil and gas in Alberta, while ignoring industries that are strong and expected to get stronger.
“Alberta’s second, third and fourth largest industries — forestry, agriculture and tourism — are all probably set to have record-setting years in 2015,” he said. “They all do really well with low fuel prices and they really benefit from a 79- or 80-cent Canadian dollar and, particularly in the case of forestry, they benefit from the availability of labour that they compete for with oil and gas.
“In 2015, those forestry producers in northwestern Alberta are going to see some nice, juicy resumes coming through the door. Lumber panel board prices are close to record highs, the U.S. housing market is surging back (so) all the planets are aligning in the right way for forestry in2015.”
ATB’s next provincial economic forecast will call for limited growth in Alberta.
“I still see no compelling evidence to say that Alberta’s going to be in recession and contraction. I know there have been a couple of other forecast groups that have now dropped a negative sign in front of their digit for Alberta (but) we’re still calling for very modest growth (in our upcoming forecast),” said Hirsch. “But 2015, no matter how you slice it or dice it, is going to be a weak year for growth and we need to anticipate that.”
Hirsch channelled U.S. President Franklin D. Roosevelt’s speech after the attack on Pearl Harbor in 1941.
“The biggest threat to Alberta’s economy in 2015 is not $46 oil, the biggest threat is fear. Once fear takes root, then you make irrational decisions and irrational decision-making has a way of bringing everything down under its own weight,” said Hirsch. “I ask you all to not feed the fears
