Q&A: What Alberta's economic growth in 2017 will mean for next year

If you were keeping up withbusiness newsthis year, you probably saw theeconomy in Calgary catch a pretty good bounce.

Calgary's GDP was forecast to jumpnearly five per cent,investors saw returns as stock markets enjoyed record-high increases and the financial worldscratched their headsat therise, fall, and rise again of thecryptocurrencybitcoin.

Butwhat goes up caneasily come down, andgrowth in Alberta could fall again in2018.

Business expert Deborah Yedlin recapped some the biggest business stories of 2017 with theCalgary Eyeopener and how they could affect the city's economic outlook next year.

The following is an excerpt from that interview:

Q: What kind of growth did Calgary see this year?

A: We did see that Calgary grew quite significantly in 2017 and the conference board was talking about our GDPgoing to increase 4.6 per cent this year making it the fastest growing Canadian city for 2017.

And Edmonton actually wasn't far behind.It had 3.9 per cent forecastbut the news there, of course, is we had a good year this year, and next year it's expected to slow down somewhat in both Calgary and Edmonton

• Calgary to have Canada's fastest growing economy this year, Conference Board says
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Q: What does the increase of commodity prices mean for the oil and gas sector next year?

We saw West Texas Intermediateup 10 per cent this year, Brent crude oil was up 16 per cent.

The biggest story was natural gas prices are down below $3and they'vebeenstuck there andthey'vebeen down 16 per cent in 2017.

I think we saw a firming of oil prices.We saw the numbers definitely continue to improve in terms of quarterly results, but we're not seeing the accompanying boost in capital expenditures because companies are still being extremely cautious.

• Brent oil price hits 2-year high as OPEC and Turkey talk down supply
• Natural gas industry in 'precarious' position as prices dive

Q: What results can we expect from some of the big oil patch deals this year?

A:Cenovus bought the ConocoPhillips assets, it was a $17-billion deal in March. And that was just after Canadian Natural decided to buy Shell and Marathon Oil's oilsands assets as well for about $12.4 billion.

• Royal Dutch Shell signs deals to sell oilsands assets
• Cenovus Energy reports $69M loss in 3rd quarter

And so both of those deals were interesting for a couple of reasons: one was we continue to see foreign oilsandscompanies exiting the oilsands and the fact that those deals were both financed in the equity markets.

So clearly the markets were willing to finance the companies that were viewed as good long-term plays.

What came out of this, of course, was that themarket wasn't as happy with that [Cenovus] deal as they were with the Canadian Natural deal.Stock went south andthe CEO, BrianFerguson, was going to step down and he did that at the end of October.

• Cenovus shares plummet on news CEO to retire and up to $5B in assets to be sold

Q: How do you summarize this record-breaking year for the indexes?

A: I think it was just a surprise for so many people. Nobody expected to see the kind of growth in the markets that we saw this year.

• Dow Jones industrial average closes above 23,000 for 1st time

When you look at the Dow Jones industrial average, it's up 25 per cent since last year. It was the first full year of President Trump andwe had no idea the kinds of things he would be able to push through in terms of his agenda.

Every week it seemed there was another record-high. It was incredible.

Q: What do you make of the cryptocurrency bitcoin?

A: It's confounding to so many people, bitcoin going from $1,000 at the beginning of the year to bumping up to $20,000 and then down again.

So many people look at this as a bubble and it won't end well because it's not really backed by any store of value. People are saying in 2018 you'll see a range anywhere from [as high as] $6,500 [down] to $2,000, but who knows?

• Beyond bitcoin: Howcryptocurrencyis changing the world

The Canadian dollar is backed by value. What is bitcoin backed by? We're not sure.

Q: What does all this mean for the economic growth in Calgary in 2018?

A: We're starting to see the energy sector find its new footing in a new cost environment.

There's a lot of really interesting things that are happening that are bringing in people from the energy sector ... that are looking to apply their skills somewhere else.

And I think there's a lot of optimism. We have to realize that Calgary has a lot of potential.We have a lot of intellectual horsepower, we are entrepreneurial and I really got a sense that possibility is coming back to Calgary.

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With files from the Calgary Eyeopener