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Alberta will sink into recession this year, as provincial fortunes turn amid oil’s collapse, CIBC predicts
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8 D% j+ p0 g r yRepublish Reprint: U+ }, r8 K9 U; z
Gordon Isfeld | February 17, 2015 | Last Updated: Feb 17 6:00 PM ET
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+ `: W( W: {) B- ~Last year Alberta lead Canada's growth, but the plunge in oil prices has turned the tables on the nation's energy giants.
. Y0 q4 g& [$ VBloombergLast year Alberta lead Canada's growth, but the plunge in oil prices has turned the tables on the nation's energy giants.; S% O. j T/ H0 b4 p9 O" \
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OTTAWA — Consistently low oil prices could dramatically alter the economic landscape of Canada in the coming year and beyond, with Alberta slipping into a “mild” recession as a weak dollar helps lift the manufacturing hubs such as Ontario.
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That pattern is already being reflected in a slowdown in the oil patch-fueled housing market in Calgary and Edmonton, in addition to an anticipated knock-on increase in unemployment rates in the province.2 x3 \4 ]8 u" N- |' \) G
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In a report released Tuesday, titled The Tables Have Turned, economists at CIBC World Markets said recent data show “just how sharply the growth leadership is likely to swing.”
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Most startling, perhaps, is the likelihood Alberta will go from the leading economic power house in 2014 to recessionary levels this year.
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% V7 T4 U( R/ H% v; `“Alberta looks headed for a mild and temporary recession,” said economists Avery Shenfeld and Nick Exarhos, pointing to a 0.3% decline in 2015, compared with 4.1% growth in 2014.
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As well, they see growth in Saskatchewan — the country’s other major resources-heavy province — suffering in 2015, managing an advance of only 0.8% this year, after 1% in 2014, but likely avoiding an outright downturn.* ^ y; C- I% l% X b8 |1 `
1 c& `- G4 W; x- `However, Newfoundland and Labrador — also reliant on energy revenues — could contract more significantly this year, by 1.3%, and in 2016, by 1%./ ~) Z7 S8 `4 R% F0 F
9 l t0 E \% x; C" W/ E+ @In contrast, Central Canada “should enjoy a small upside surprise,” thanks mainly to a healthy U.S. economy, CIBC predicts, along with a lift in exports from a weak Canadian dollar.- ~# Y7 y9 R% y
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4 G$ P2 B9 U6 XCanada’s oil capitals are headed for their first major housing correction since 2008, TD warns
! s" Z- T% l- C; FCenovus Energy Inc slashes staff by 15%, freezes pay in ‘challenging times for oil and gas industry’/ G2 e% I" j: O1 f4 @4 a$ L) O' j
The best oil traders in the business say this rout is not over# p* h# p, ~# D
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3 J) E" P: L6 C* w; n) T& L" WThe Ontario economy will expand 2.8% this year, up from 2.1% in 2014, and add 2.8% next year, according to CIBC. Quebec should add 2.4% this year and 2.6% in 2016, after a restrained advance of 1.8% in 2014, the bank said. At the same time, British Columbia will continue its mid-2% growth trend.
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% w) h# ^1 S% @ x) |: ]5 V“That will translate into commensurate shifts in the employment picture, alleviating pressure in some areas — where, if anything, workers are currently in scarce supply — and lowering the jobless rate in Central Canada, where it has been stuck above the national average.”/ n0 f& D3 H3 R3 ] B
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For example, Alberta’s jobless rate could rise to an average of 6.8% this year, from 4.7% in 2014, the CIBC said, while Ontario should see its unemployment level fall to 6.6% from 7.2% last year.% F7 m" Y9 F' @3 x! ?8 H! |) d
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CIBC expects overall growth in Canada to be around 1.9% this year, down from 2.4% in 2014, and rising by 2.5% next year.1 a6 t. y/ J- [! c' E) {
6 Y; T5 _3 ]0 q$ k& Y. @0 D0 Y+ SContrast those with the Bank of Canada’s 2.1% outlook for this year and 2.4% in 2016 issued in January, when policymakers surprised markets by cutting their benchmark lending rate to 0.75% from 1%, where it had stood since September 2010.
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The central bank’s GDP forecast is based on an average oil price of US$60 a barrel in 2015 and 2016. Crude was trading above US$53 on Tuesday, a gain on recent sessions.* h/ E& t Y, [# B# j9 i0 p2 O
3 a! j( q1 O; }, f* FMeanwhile, the Canadian dollar closed near the US81￠ level.
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# H# ?. V6 R# M, a5 g" ?# v5 }( x6 P; \The regional shift is also evident in the housing market, where the slowdown in Calgary and Edmonton helped pull down national sales by 3.1% in January from December and by 2% from a year earlier, the Canadian Real Estate Association said Tuesday.
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“As expected, consumer confidence in the Prairies has declined and moved a number of potential homebuyers to the sidelines as a result,” CREA president Beth Crosbie said.
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Total January residential sales in Calgary were down 35.5% from a year earlier, while Edmonton fell 22.7%, Saskatoon lost 24% and Regina was off 6.9%./ D8 A$ u$ I% m
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“There’s little mystery behind the sudden reversal of fortune for the national figures, as sales in Calgary and Edmonton — and Saskatoon — fell more than 20% from a year ago, in what had been the hottest markets in the country,” said Douglas Porter, chief economist at BMO Capital Markets. |
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发表于 2015-2-1 17:34
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