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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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( Y/ `8 s# x' t5 t& ?Republish Reprint
1 k* l3 l( ]% [! _* L# XGordon Isfeld | February 17, 2015 | Last Updated: Feb 17 6:00 PM ET
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6 h/ o( Z! J8 E8 J0 D( _Last year Alberta lead Canada's growth, but the plunge in oil prices has turned the tables on the nation's energy giants.
5 v/ ]* Q8 ~) kBloombergLast 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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1 w2 c1 s! O" 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.3 Q/ H3 \+ k9 K w/ v
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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.4 F8 u. [: ^3 _! W3 t5 Y
4 f! V* c i- z) K# zIn 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.”6 x( R; K: O- ^; L
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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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, Z* v# E9 j1 S“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.- z) \( W) {8 D+ a% A
) N4 L( y6 g+ r$ f0 @4 UAs 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.& ~2 h$ E9 Q* |" k: k
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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%.
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6 E( q. K# O# H6 J" n; y4 TIn 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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V8 D. y4 [# g- LCanada’s oil capitals are headed for their first major housing correction since 2008, TD warns' P1 h* ]1 E7 z
Cenovus Energy Inc slashes staff by 15%, freezes pay in ‘challenging times for oil and gas industry’
8 G8 x U; }4 u" M( C9 b1 PThe best oil traders in the business say this rout is not over
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+ p, f2 ^6 a9 y/ a" b/ w8 p/ 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.4 z5 w( [' i1 P- D0 U% t
/ I+ ^8 m$ L3 W9 C% V“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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For 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.. ~) O5 c @* L& f2 Z+ A
$ K8 O8 h& i5 u0 Z7 OCIBC 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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Contrast 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$53 on Tuesday, a gain on recent sessions.
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Meanwhile, the Canadian dollar closed near the US81￠ level.
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* G! r5 `; A$ S# ?2 GThe 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.1 h7 D, l! m6 F) U1 {
1 |, W7 ^2 ^ ?$ n“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.- ]& N! e# X6 F% Z
6 \2 B. s. }' t: K' D( X) y0 VTotal 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%.; J, o R0 A# g8 K- e6 C5 Z# Q
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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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