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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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6 b1 F+ \% D% r# K: d p1 rGordon Isfeld | February 17, 2015 | Last Updated: Feb 17 6:00 PM ET
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( ` g+ z E3 ~! T* x% D# e: wLast year Alberta lead Canada's growth, but the plunge in oil prices has turned the tables on the nation's energy giants.
" q0 F) O2 u G0 H2 L& rBloombergLast 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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6 x. S9 n1 o1 p2 {9 P$ AThat 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.+ d* P7 @- O0 g: p7 A7 A6 B
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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.”2 o4 o# ~9 B* h4 P+ |
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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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! d3 T; S9 N, I) b- H C“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 2014.6 C' s) E$ P* l5 z0 J2 V
R) o! p8 o- c- n3 O$ ?* mAs 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.- t& t3 L" T! d( M W
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However, Newfoundland and Labrador — also reliant on energy revenues — could contract more significantly this year, by 1.3%, and in 2016, by 1%.: x) O1 ]: t7 Y# H, E) p
' C! s L0 U. F1 d# @/ e. FIn 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.
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The 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. u9 W" M5 w: T0 d1 m+ q ?
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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.”0 L) S3 ?8 _/ O4 ^1 O3 Q) [8 {5 E
! j$ H2 G. k6 b' e/ I. q3 w jFor 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./ g- Y$ d' E' Z" J6 t4 B
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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 i' a3 v: A1 j9 J; W5 I
) S6 o# E9 L0 y' X' P; |7 bContrast 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 2010.3 A( I' ^2 ?1 j6 i
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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$53 on Tuesday, a gain on recent sessions./ J5 ~+ l1 l1 n3 g1 W- ~
S0 K1 o, g$ Y! TMeanwhile, the Canadian dollar closed near the US81￠ level.0 _7 ]: j+ c- I3 i/ Q1 t9 a! Y& h% k
8 b" u1 I0 o8 ]' S/ wThe 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.# Q' q/ D# u! B$ k& `" W2 Q
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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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! y9 Y. g9 J$ W. X$ T2 uTotal 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%.# e* i2 l) ]# ?3 S: J4 g. u
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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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