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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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: [% }! j4 F5 f3 b6 P) b3 p# ~2 s0 {+ U& xRepublish Reprint
; e$ ] ~" u9 H, Y) G. e. {7 Y0 _: xGordon Isfeld | February 17, 2015 | Last Updated: Feb 17 6:00 PM ET5 u* m9 K7 A; G; s6 _! t) Z0 Y
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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.
! I" l+ B8 R9 }: K* w) TBloombergLast 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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9 `6 P9 T4 x6 @- X# e) t1 |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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) o% L. v7 a$ i8 t, R8 } BThat 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.* s, V* F% h/ A+ u6 K) D+ S0 V0 W
; |0 @& h, J2 m& d8 }5 I8 CIn 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.”/ x" a* @: P$ J2 ?# T7 l
3 ]3 u7 i' @5 f4 }0 ?* p1 g" Y- H/ [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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“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.' ?( @8 O0 ~( G
9 Z# u1 P4 W4 C+ j$ d LAs 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& m/ I5 z9 U/ L* L
# O6 c, J) L" hHowever, 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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* K; a8 i( P6 U$ ]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.
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Canada’s oil capitals are headed for their first major housing correction since 2008, TD warns' m* N7 E5 I: l1 Z H7 s) v6 U
Cenovus Energy Inc slashes staff by 15%, freezes pay in ‘challenging times for oil and gas industry’, Z$ ]! x6 M0 U
The best oil traders in the business say this rout is not over# W- [( Q, u' N z. t
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p0 M# R/ i4 n3 W1 bThe 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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( k( T9 \ r5 L3 \. g4 S) P“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.”
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& ?, v7 N4 H2 M2 h8 D1 dFor 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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8 C. P; E; {# g* H6 s: \9 uCIBC 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./ m! c% K0 F0 ?- `$ P. n
5 f( X7 f( j4 gContrast 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.
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Meanwhile, the Canadian dollar closed near the US81￠ level.
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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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a/ y7 b6 t A- ^# u7 W4 H5 y“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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2 F: R- M+ K1 b* S- C1 CTotal 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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; q3 [& Y) E& _1 O. i6 {“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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