02/09/2015 11:18 EST | Updated 04/12/2015 05:59 EDT

Alberta Economic Outlook Dims In Face Of Lower Oil Prices

The outlook for Alberta's economy is darkening as economists revise their 2014 estimates of the province's growth in the face of low oil prices.

CIBC is predicting Alberta’s economy will shrink by 0.3 per cent in 2015, as activity in the oilpatch dries up.

And the Conference Board of Canada says the drop in oil prices will strip more than $40 billion US from corporate coffers this year.

It has revised its growth forecast for all of Canada to 1.9 per cent for 2015, down from 2.4 per cent in its previous forecast given last November.

"The pain will be severe, particularly in Alberta and Newfoundland and Labrador, and, to a lesser degree, in Saskatchewan," the Conference Board report said.

The economic think-tank estimates oil prices will level out at about the $60 US a barrel level, probably in the first quarter of 2015. That's still 40 per cent below last year's prices.

If Canadian oil producers export about three million barrels of oil per day in 2015, the low price will cost them more than $40 billion US in lost revenues, the report estimated.

That will lead to a slowdown in capital spending and in employment in the sector.

In its latest forecast, CIBC's research department says unemployment in Alberta will jump from 4.7 per cent to 6.8 per cent by the end of the year.

Alberta has enjoyed a net migration of workers, many from Atlantic Canada, in recent years to snap up easy to find jobs. But as work disappears, these people might be slower to leave the province, pushing up unemployment figures.

The Conference Board is also forecasting a hit to Alberta's housing sector with a steep slowdown in housing prices and housing starts.

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