Skip to main content

Economy Oil slump sees confidence slide in Prairie provinces

Investment in Alberta’s energy industry has plunged this year as low oil prices make many sites unprofitable.

Norm Betts

The Globe and Mail is hosting a debate on the economy among the leaders of the three main political parties on Thursday at 8 pm (ET). Click here for more details.

Sentiment among consumers in Canada's commodity-rich Prairie provinces dropped to the lowest since 2008, data from weekly telephone polling show, as prices for resources such as crude oil remain depressed.

The Bloomberg Nanos Confidence Index for the three Prairie provinces – Alberta, Saskatchewan and Manitoba – fell to 47.7 in the period through Friday, from 49.5 previously.

Story continues below advertisement

That's lower than the February reading of 49.2 that coincided with a drop in New York crude futures to below $50 (U.S.) a barrel.

Prairie confidence had recovered as oil prices rose to as high as $56.1 in May, before slipping again with the latest round of weakness.

West Texas Intermediate futures traded below $45 a barrel Monday after falling 2.8 per cent Friday on predictions by Goldman Sachs Group Inc. the endurance of the oil surplus could push prices down to $20 a barrel.

Investment in Alberta's energy industry has plunged this year as oil at these levels makes many sites unprofitable. Alberta's crude deposits make up the bulk of Canada's reserves, which are the world's third-largest, and are among the most expensive to extract.

Prairie farmers are also grappling with the effects of a drought in the region, further crimping confidence.

The Nanos survey showed consumer sentiment nationwide was unchanged at 53.3, close to the Aug. 7 reading of 52, the low this year.

Increasing optimism about the future of the national economy was offset by a decline in sentiment about local housing markets.

Story continues below advertisement

"The overall forward mood in Canada remains net negative," said Nanos Research Group chairman Nik Nanos.

The percentage of respondents who said the economy will be stronger in six months rose to 14.8 per cent, the highest since July 3.

Those who feel home prices will decrease in the next six months rose to 17.1 per cent, from 16.5 per cent a week earlier and the highest since mid-April.

Every week, Nanos Research asks Canadians for their views on personal finances, job security, the outlook for the economy and where real estate prices are headed.

The survey, based on phone interviews with 1,000 people, uses a four-week rolling average of 250 respondents. The results are accurate to within 3.1 percentage points, 19 times out of 20.

Report an error
Tickers mentioned in this story
Unchecking box will stop auto data updates
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

Cannabis pro newsletter