Alberta will stay in recession this year before rebounding in 2017, Conference Board of Canada forecasts

Alberta's economy will remain in recession this year as the province struggles with its worst downturn in three decades, but there is a recovery on the horizon, according to the Conference Board of Canada.

In the federal research organization's spring provincial outlook, released on Monday, analysts predict Alberta's real GDP to contract by two per cent for 2016.

• Five recent signs Alberta's economy isn't doing so great

"Business investment in the oil and gas sector fell by $17billion last year and, with oil and gas prices forecast to remain low, a recovery in 2016 is not in the cards," the report says.

However, the board predicts Alberta will climb out of recession in 2017 with a 2.5-per-cent growth rate, fuelled in part by the rebuilding of wildfire-ravaged Fort McMurray.

"As displaced residents return to their Fort McMurray homes and as oil production resumes and rebuilding gets under way, we expect to see only a small negative impact on the economy for 2016 as a whole but a positive and bigger impact in 2017," the report says.

The president of the Calgary Chamber of Commerce is less optimistic there will be astrong recovery next year.

"I'm not sure we'll necessarily hit that kind of number 2.5 would be above national growth levels. And I don't think we're actually going to get there. I think we're going to be still pretty modest in that one-, one-and-a-half per cent range," said AdamLegge.

Nationally, the board's forecast is rosier, predicting a 1.5-per-cent economic growth rate an improvement over the previous year.

"Good news is coming from Ontario, British Columbia, Prince Edward Island, and Manitoba. These will be the only provinces with real GDP growth above twoper cent," the report says.

The board said it believes the price of oil seems to be stabilizing in the $40 US range as global supply imbalances have started to dissipate.

"An economic recovery is in sight as crude oil prices are finally recovering from their two-year plunge after reaching the floor early this year," the board says.

• MORE ALBERTA NEWS|'Don't lose your nerve in the face of this onslaught of right-wing rhetoric,' Alberta NDP told
• MORE ALBERTA NEWS|Wildrose constituency association flip-flops on Brian Jean, now 'stands with him unconditionally'