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Marie-Christine Bernard, associate director for the provincial forecast, said while Alberta will continue to feel the effects of difficulties in the struggling energy sector, a slight improvement in oil prices and increased public infrastructure investment should help the province avoid another recession in 2016.

Energy investment has fallen by 15.2 per cent this year and will pull about $11 billion out of the economy by the end of 2016, the board said.

“Low oil prices, wage rollbacks and deep staffing and capital budget cuts in the energy sector have hurt the Alberta economy, sending it into recession,” the board said.

“Investment will be slow to recover and is not expected to return to the level seen before the crude prices collapse within the next five years.”

The board said retail sales in Alberta are expected to drop by 3 per cent this year from a year ago and remain “anemic” over the next two years. Alberta’s unemployment rate — now at 7 per cent — is expected to be 6.7 per cent in 2016 with employment growth limited to 1 per cent between 2016 and 17.

“However, it is not all bad news for Alberta’s economy,” the report states. “Bitumen exports to the U.S. continue to be strong and non-conventional oil production is set to increase by an average of 4.9 per cent annually over the next five years, though profit margins will be affected by lower oil prices.

“In addition, the provincial government’s plan to invest billions on infrastructure projects, including schools, hospitals and roads over the next few years will help offset some of the impact of lower crude prices on the economy.”

The board is forecasting economic growth in Alberta of 2.2 per cent for 2017.

mtoneguzzi@calgaryherald.com

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