Sluggish economy expected for 2020: ATB economist

“Social media has connected us in certain ways, but in a lot of other ways, we’re seeing rising levels of people who live in social isolation,” he explains. “In other words, they are not connected to any community at all. This is an economic problem because mental wellness and issues pertaining to mental illness are costing the Canadian economy over $50 billion a year.”

“If we can start to solve some of those issues around mental wellness,” continues Hirsch. “By making sure that communities are strengthened, and fewer people are living in isolation, we can actually start to help our economy and free-up that spending for other priorities.”

With the second mega-trend of economics – employment and income – Hirsch says jobs and careers are constantly changing, so people need to adapt.

“In the 20th century, jobs and careers were kind of a straight shot, but in the 21st century, it is much more complicated,” says Hirsch. “It is going to be a zig-zag line for young people entering the workforce. Rather than focusing on a single career, they’re better to focus on what are my natural strengths and abilities as a person? How can I hone those? And how can I then apply those into any number of different opportunities?”

Regarding the third mega-trend – geo-politics around the world – Hirsch says it’s important to acknowledge a lot of moving parts in the global economy.

“We are seeing the rise of nationalism, we’re seeing the rise of populous leaders like Donald Trump and presidents in Brazil and what’s happening in the Brexit,” adds Hirsch. “International trade is very important for Canada and Alberta and we will no longer be able to rely on those trading patterns like we used to. Canada will remain a trading nation but it is going to be a bit more of a complicated globe in the years ahead because of the shifting geo-politics.”

Along those same lines with the rise of Wexit in Alberta, Hirsch says he understands the frustration, but asks whether Alberta as a separate country is likely to be viable.

“We’d be land-locked, we’d be negotiating now with foreign countries on our borders to the south and every other direction,” adds Hirsch. “I think the uncertainty that we would create by talking about separating, I think that uncertainty enough would be enough to drive a lot of investment and corporate presence out of Alberta.”

Looking ahead, Hirsch anticipates Gross Domestic Product (GDP) growth of 0.9 per cent in 2020.

“Now if we see some better progress maybe on the Keystone XL pipeline, or continued progress on Trans Mountain, I might be prepared to raise that a little bit,” says Hirsch. “But overall, 2020 is likely to still feel kind of sluggish. Slower growth around one to three per cent for Alberta, that is going to be the new norm. I don’t think we’re going back to the four, five, or six per cent growth like we would have seen at the beginning of the ‘teen’ decade.”

Hirsch concludes, however, that Alberta needs to get off of the metaphoric, economic roller coaster it’s on.

“I get why we want the boom days to come back, but if we give up the bust, we also need to be giving up these five or six per cent growth rate booms that we experience every so often,” he suggests.

“I get the nostalgia of looking back and saying, boy, wouldn’t it be nice if we had $100 oil and pipeline access for ever, but those days are gone for a lot of complicated reasons. But I think we can also anticipate a bright future for Alberta, slower growth, energy sector remains our backbone, it’s not going away, but the growth now starts to be taken up by new and diversified industries.”

by Sheldon Spackman

Sluggish economy expected for 2020: ATB economist

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