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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
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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." \. M6 z( v8 S
BloombergLast year Alberta lead Canada's growth, but the plunge in oil prices has turned the tables on the nation's energy giants.3 C% x) b( a% R: K5 u
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7 e, J# D7 Z+ p) X% m. oOTTAWA — 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.) [0 R& Q4 s5 i t
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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.
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% Z5 K7 Z) m* }1 `- WIn 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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( o+ x) A0 q: U& l! r“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.
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6 a4 i# y2 Z. @5 u) r7 w( WHowever, Newfoundland and Labrador — also reliant on energy revenues — could contract more significantly this year, by 1.3%, and in 2016, by 1%.1 y* [4 q h1 ]# X$ d# _
) u* s. d* h% d. B, PIn 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.6 @' \% \+ ?& a D( E
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( Z0 V7 P% k4 J1 ?" V( m2 N, eCanada’s oil capitals are headed for their first major housing correction since 2008, TD warns& X1 l$ j% D/ e- h' }0 R
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The best oil traders in the business say this rout is not over
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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.7 N8 Y+ W: e/ U8 t7 y% V6 _
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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.”* h2 W) L8 ` P, n+ W/ d
0 K# o3 B8 M* J- F6 J. l3 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.
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( r% W7 b5 l2 ~$ ^" w% vCIBC 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.& G5 D% |, f# I8 P6 v, `1 {/ t; Z% p: C
: \8 F) e6 b/ A4 \1 r! W1 S9 WContrast 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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+ l' p( o+ B$ N8 D2 [! wThe 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$53 on Tuesday, a gain on recent sessions.# B7 j- k$ z( _8 H7 q( d+ @1 T
: o: W4 [0 g2 l& K* R2 F XMeanwhile, 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.7 B( F. s, k" U4 L/ B V$ j7 d- V1 j; Y
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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%. {3 n2 g* W) z" l% k8 z! x) G' `2 I
! b1 A/ q! ?3 \2 O6 \9 k2 q“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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