Alberta economy Photo: davebloggs007/Flickr

Falling oil prices will cause Alberta’s economy to “tailspin” over the next year, according to a new Conference Board of Canada report.

bc economy 1 In its Provincial Outlook for 2015, the board forecasts the province’s real GDP will contract by 1.5 per cent — the biggest economic decline of any province.

“The party appears to be over in Alberta, at least over the medium term, as low oil prices send chills through the economy, said Marie-Christine Bernard, the board’s associate director, in a release. “In the next couple of years, a return to four per cent-plus growth is not in the cards, since oil prices will not hit triple-digits any time soon under current market conditions.”

The lagging oil industry means fewer jobs, which in turn “will weaken the housing market,” the report says. An ominous forecast echoed in recent weeks by the CMHC, BMO, CIBC and other major banks.

The forecasted 1.5 per cent decline follows several years of GDP growth in the range of three to four per cent annually. Still, the board says prospects in the oil industry, both for capital expenditures and jobs, should gradually improve later this year and next as the global supply glut eases and worldwide demand improves. The Alberta economy is expected to grow by a moderate 1.2 per cent next year, the board predicts.

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