CALGARY

Alberta is headed for a dramatic economic slowdown as the province's vital energy sector ratchets down exploration, drilling and expansion in the face of $50-US-a-barrel oil, an economist said.

Crude prices dipped below $50 per barrel on the New York Mercantile Exchange yesterday for the first time in more than three years, carving about two-thirds off the commodity's record of $147, reached less than five months ago.

Robert Kavcic of BMO Capital Markets is predicting a meagre 0.3 per cent growth rate in the province next year -- the lowest since 1986, when oil prices were also at low levels.

And he's calling for a 1.1. per cent increase in employment next year.

"That in itself isn't bad, but relative to the last four years in Alberta that's a pretty drastic change,'' he said, noting that the province has gotten used to job growth of as much as five per cent a year.

Other evidence of a slowing Alberta economy includes a significant cooling of the once red-hot housing market and a marked decrease in consumer spending.

"Actually, the province is trailing the country now in retail sales growth, which is also a drastic change in the past three or four years,'' Kavcic said.

The sharp slide in commodity prices, compounded by limited access to credit to finance projects, has caused many oil patch players to scale back big projects and slash their spending.

The partners in the Fort Hills oilsands project -- Petro-Canada, UTS Energy Corp. and Teck Cominco -- announced earlier this week that they're going to put off a final decision on the mining portion of the development into next year and are shelving its accompanying $10-billion upgrader indefinitely.

Suncor Energy Inc. is spending about a third less next year than this year as it delays work on its Voyageur upgrader.

And decisions on future expansions to Nexen Inc. and Opti Canada Inc.'s joint Long Lake oilsands project as well as Royal Dutch Shell's Athabasca oilsands project have also been deferred.

Edward Jones analyst Lanny Pendill said he expects to hear about more cuts to next year's budgets if oil continues to trend downward or even stays at its current levels. "And that's going to be across the board. ''