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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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Gordon Isfeld | February 17, 2015 | Last Updated: Feb 17 6:00 PM ET! o9 r1 g! Y7 ?+ l6 U
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% R* l6 E; \ D/ X& uLast year Alberta lead Canada's growth, but the plunge in oil prices has turned the tables on the nation's energy giants.2 m* M F4 ^, K
BloombergLast year Alberta lead Canada's growth, but the plunge in oil prices has turned the tables on the nation's energy giants.- i8 n) F H6 s3 ~* j# K
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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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/ ]! I! u2 h5 A( LThat 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.: T: L( }1 c1 p: ^1 U# [$ ]
z( C- H# t8 _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.”( {! z1 k3 A5 B" t- W
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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.0 M, B* }! h; ~: J: I7 }
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“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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, N. V+ _0 z. O4 {6 M& b2 BAs 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.
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5 }4 d. H" \' A) b( OHowever, Newfoundland and Labrador — also reliant on energy revenues — could contract more significantly this year, by 1.3%, and in 2016, by 1%.9 f w. `, T t- w* L9 R+ U5 }
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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.$ r) S5 f% F; C1 }5 C: r
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7 `% ~5 ?* v$ l% b9 V6 DCanada’s oil capitals are headed for their first major housing correction since 2008, TD warns0 c. E2 H! `+ {; P; @7 r& y ^3 o
Cenovus Energy Inc slashes staff by 15%, freezes pay in ‘challenging times for oil and gas industry’
' O8 ]2 z3 I( R: H n- R2 K( n7 QThe best oil traders in the business say this rout is not over7 B4 y6 P( K" C T/ H) H
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8 x6 o9 Q. \; D+ sThe 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.( K) n7 p# Z( m; H" M$ G, X
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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.”' M7 Z, t/ ^/ T2 P0 q$ X
1 c' G& s8 j: g, mFor 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.
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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.
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2 {+ S0 _! S% J7 HContrast 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., F9 P$ d. u b# v" ^
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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$53 on Tuesday, a gain on recent sessions.# \7 Z4 b" P& d$ K6 x* A+ R, A
/ L, L; w5 j2 w8 T. k( @Meanwhile, the Canadian dollar closed near the US81￠ level." S4 v r6 G$ o2 I* [) Q: [
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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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5 s, }2 `: p; m2 A; l“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.5 V( G4 O% u8 H. q6 y" h* q' X
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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%.
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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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