Calgary's economy should grow by 2% in 2017, Conference Board forecasts

The Conference Board of Canada is adding its voice to a growing chorus of economic forecasters saying Calgary's economy should improve in 2017.

The city's economy shrank by 3.2 per cent in 2015 and is expected to contract another 2.1 per cent by the end of this year, according tothe Conference Board'sMetropolitan Outlook for Autumn 2016.

"However, the Conference Board expects that 2016 will mark the trough of this latest recession," the report reads.

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"The benchmark crude oil price is expected to move upward as market imbalances gradually dissipate," the report adds.

"As a result, layoffs and cuts to capital budgets in the oil and gas sector will ease in the coming months, laying the foundation for a modest upswing next year."

The Conference Board forecasts that Calgary's real GDP will grow by two per cent in 2017.

Oil prices are expected to gradually rise next year "as the supply-demand imbalance slowly works itself out," according to the report, which adds a note of caution.

"There is some downside risk to this outlook, however, as oil prices lost some ground in late summer because of American crude stock buildup, itself caused by weak demand from refiners left with large gasoline inventories," it reads.

"If this situation continues, price gains could be lower than expected in the coming months, causing us to downgrade our outlook for Calgary."

In recent weeks, numerous banks have predicted that Alberta's economy, as a whole, will emerge from recession in 2017, including BMO, TD, and ATB.