A new report says direct employment in Canada's oil and gas sector is expected to fall by more than 12,000 jobs this year.

PetroLMI says the workforce is forecast to drop to about 173,300 in 2019, a decline of 23 per cent from 226,500 in 2014.

It says the oil and gas labour market shrank quickly in 2015 and 2016 following a commodity price collapse and remained relatively flat through 2017 and 2018.

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In its 2019 labour market update, PetroLMI says about 12,500 jobs are at risk this year due to factors including low commodity prices, a decline in capital spending and uncertainty about getting oil and gas to market.

This chart from the report breaks down the project changes in employment in different parts of the country. (PetroLMI)

It says workers in oil and gas services will face the highest employment risk in 2019, while the pipeline sub-sector is the only category that is expected to register slight growth.

Provincially, Alberta is expected to lose the most jobs, with a projected decline of 9,600 this year.

"Until such time as additional export capacity becomes available, the employment outlook for Canada's oil and gas sector will continue to be impacted," said Carol Howes, PetroLMI vice-president.