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Alberta will sink into recession this year, as provincial fortunes turn amid oil’s collapse, CIBC predicts5 X" h+ P2 h) L
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% v1 d# _# S, f' OGordon Isfeld | February 17, 2015 | Last Updated: Feb 17 6:00 PM ET$ l) o8 `4 K+ B; H- ~+ t
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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.
/ P, i4 B2 g' M! rBloombergLast year Alberta lead Canada's growth, but the plunge in oil prices has turned the tables on the nation's energy giants.1 F: K) J1 l$ q% g4 R/ k
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% ]7 B, S, k1 _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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2 |" V; V8 e' ? k! p2 jThat 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.”' B0 r1 r- N3 `0 T/ G1 r. O% h2 g% p
6 }& s6 c8 q7 m* A" _# u) {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$ t' Z4 P$ J+ t1 o; i4 O: n! \“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., s" `/ x! U4 G8 M0 z0 F6 h' Q
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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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However, Newfoundland and Labrador — also reliant on energy revenues — could contract more significantly this year, by 1.3%, and in 2016, by 1%.0 r$ z. s( k( ^7 i. U1 P( c# h
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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.
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. T: _. G$ K6 M' C s. HRelated
2 y- S* o% l( h4 e) Y. kCanada’s oil capitals are headed for their first major housing correction since 2008, TD warns+ `7 `$ O0 A4 \) f4 Z% V
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/ d; V7 v: V' b! r! U* FThe 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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; C9 P( @+ |: ^4 u" ]+ n“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.”; i1 ^& Z! w' {
) r$ \, V9 }# g* T+ 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.' W% i3 e9 {/ V; h3 U2 ?
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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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( }: V0 M* d- y; c/ @' O8 QContrast 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 2010.2 N L9 n, H1 S& K3 k" j- u
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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$53 on Tuesday, a gain on recent sessions.) G0 q2 R2 l4 {7 D( a. c2 W
9 |# V) S+ n9 ?! d5 L8 S- ^# iMeanwhile, the Canadian dollar closed near the US81￠ level.' n% e" k+ v; D5 r$ e0 E& V
) L5 Q0 Q$ C& E+ VThe 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. {# V4 D% A4 |8 y
( K; i( Q6 I* k5 s# p“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.0 r. G& f+ }6 h
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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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* Y$ ?' Y6 A! X% n; J$ }' [“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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