Calgary and Edmonton are expected to remain in recession for the second consecutive year, according a Conference Board of Canada report.
It looks like the continued weakness in the oil fields are largely to blame.
The Conference Board of Canada’s Metropolitan Outlook: Winter 2016 found that Calgary’s economy is expected to retract by 1.2% this is a continuation of the 2.4% decrease in 2015.
Employment is projected to fall 2.1% this year, causing the unemployment rate to increase to 7.5%. Calgary’s increased unemployment is expected to outpace the national average for the first time since 1987.
Last year, Calgary’s manufacturing and construction sectors were hit hard and this year is expected to have a similar outcome. In 2016 the overall service sector fell by 0.5%, led by declines in the wholesale and retail sector.
The report also found that Edmonton’s economy would decline by 1.3% this year.
“The dramatic decline in oil prices continues to weigh on both cities’ economies, and weak activity in the energy industry is spreading to other sectors,” said Alan Arcand, Associate Director, Centre for Municipal Studies, The Conference Board of Canada.
“Two of the hardest hit industries last year—manufacturing and construction—will continue to struggle this year, while conditions in the services sector will deteriorate.”
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