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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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7 t: V: {" W! ~( j5 yRepublish Reprint
$ g( l% {2 a4 D: F) f( Q! Z6 x$ Z3 jGordon Isfeld | February 17, 2015 | Last Updated: Feb 17 6:00 PM ET
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Last year Alberta lead Canada's growth, but the plunge in oil prices has turned the tables on the nation's energy giants.! z7 x9 c& S% Y1 i# @
BloombergLast year Alberta lead Canada's growth, but the plunge in oil prices has turned the tables on the nation's energy giants.
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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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. P% Q) ]+ b; TThat 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.
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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.”+ b, |0 q/ @' J
& L7 A3 X) k, ^, o8 a- |9 X1 rMost 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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# q$ w; D! q" W6 y& [“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." R5 L2 T# }: D5 ~5 }
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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.+ i8 M6 W/ F/ ~, b) u& k
" O z1 }+ s2 n- DHowever, Newfoundland and Labrador — also reliant on energy revenues — could contract more significantly this year, by 1.3%, and in 2016, by 1%.
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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.1 `" z0 a9 R7 P4 i. w2 d
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9 w8 o5 A) i% q Y c/ JCanada’s oil capitals are headed for their first major housing correction since 2008, TD warns
$ F6 \, w0 j) @$ m. r# G8 E6 cCenovus Energy Inc slashes staff by 15%, freezes pay in ‘challenging times for oil and gas industry’ y" D' R/ n) N; J! C+ G
The best oil traders in the business say this rout is not over N1 y& I; N! W- \: ^$ ]! f* F
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9 G+ ]" ~" g! O& n6 l2 zThe 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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“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.”4 x& E P: Z4 e7 u& I
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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.9 ^$ Y, m9 |" {# y( N% q( n
( ^, w: `6 H0 U' F1 y' Q5 jCIBC 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.* b/ B- t; M. c* J2 P9 I/ g
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Contrast 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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/ q2 n8 V& Y& {; b# r) sThe 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$53 on Tuesday, a gain on recent sessions.! ], L! {) R- e& b$ g6 W" o; V
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Meanwhile, the Canadian dollar closed near the US81￠ level.
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, \) j# F, s1 `& [4 aThe 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%." M. T- R9 k* C; }
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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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