05/28/2015 01:08 EDT | Updated 05/28/2016 05:59 EDT

Alberta Recession Unavoidable This Year: Conference Board Of Canada

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Man holding placard about recession

CALGARY - A recession is unavoidable in Alberta this year, according to a report by the Conference Board of Canada.

The province's economy is expected to shrink by 0.7 per cent in 2015, even though oil prices seem to have stabilized at around US$60 a barrel, the Ottawa-based economic think tank said Thursday.

Next year, it's calling for modest growth of 1.1 per cent.

"Alberta's economic performance will be underwhelming this year and next, especially compared with recent years," said Marie-Christine Bernard, with the Conference Board.

"Oil prices remain well below break-even levels for most new projects in the oilpatch and conditions are not expected to turn around until sometime next year."

The board expects 24,000 job losses in the construction and mining sectors, which will, in turn, hurt the housing market and retail sales.

But the good news is the job market in other non-energy sectors appears to be holding up relatively well and the unemployment rate in the province is expected to average 5.6 per cent this year, lower than the national average.

Also on the positive side, the energy industry has been able to boost production thanks to past investments, and oilsands crude has been able to make its way to the lucrative Gulf Coast market.

The economic hit this time around is not expected to be as severe as during the 2008 and 2009 downturn, when there was a widespread financial crisis.

The forecast did not incorporate potential changes under the new provincial NDP government, such as higher corporate taxes and royalties.

Alberta's premier is still getting her feet wet in going through the province's struggling economy but suggested the Conference Board report isn't that much of a surprise.

"We're getting a number of different projections and we're looking at all of them right now," Notley said in Calgary.

"We know that due to circumstances well beyond our control that our economy is a volatile one and we may be struggling a bit but we're going to look at all of the reindicators and will act appropriately."

While oil-producing Alberta, Saskatchewan and Newfoundland and Labrador are being hurt by low prices, British Columbia, Manitoba and Central Canada are expected to post the strongest economic growth over the next two years.

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