The Conference Board of Canada says Alberta will likely face a recession this year due to the plunging price of oil.
The economic think tank says Alberta’s latest employment and new housing start numbers are holding steady, but if oil prices stay low the province will slip into recession.
Chief economist Glen Hodgson says even if oil prices rebound to $65 dollars per barrel he forecasts that investment, profits and consumer spending will be down.
Calgary-based Canadian Natural Resources Limited (TSX:CNQ) announced Monday that it will spend 2.4 billion dollars less than expected this year.
Other major producers such as Cenovus (TSX:CVE) and Husky Energy (TSX:HSE) have also recently announced reduced capital budgets.
Energy sector experts say they will have a better indication of how low prices will affect the industry by the beginning of the next drilling season in late summer.
“It’s going to be very hard for Alberta to avoid a recession this year,” Hodgson said Monday.
“Even if the oil prices bounce back to say $65, that’s going to take a lot of steam out of investment, profitability and also consumption in the province of Alberta.”