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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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( {' d& t$ R5 p# DGordon Isfeld | February 17, 2015 | Last Updated: Feb 17 6:00 PM ET! U4 \! |3 f3 U
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! b8 \8 m+ B, T$ V9 R# j s! z- z! YLast year Alberta lead Canada's growth, but the plunge in oil prices has turned the tables on the nation's energy giants.
/ R7 A- ^* i( W/ @BloombergLast year Alberta lead Canada's growth, but the plunge in oil prices has turned the tables on the nation's energy giants.5 a2 ?/ l6 c. y g' f$ m# U' o
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* {6 T K# v) ~! ^, M. G* wOTTAWA — 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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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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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.”' G, |; D' e* c6 D7 t8 p
1 v$ @& A9 V* q1 F1 g v' GMost startling, perhaps, is the likelihood Alberta will go from the leading economic power house in 2014 to recessionary levels this year." A: N& x7 S1 u$ H* A3 ]% d
" q- }! c f2 }% k- r. d“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.% v+ S0 \: K- ~. ^( ^" R7 A
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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.1 w* x. S6 O+ g6 O0 V" e! ]9 ^7 @) u
* F$ E0 P1 @1 v, RHowever, Newfoundland and Labrador — also reliant on energy revenues — could contract more significantly this year, by 1.3%, and in 2016, by 1%.3 G ~) I" k1 O& Z
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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.. {" K Q+ z p* C" [' M
2 L3 E" { ` x( i: z, ^! d ARelated/ E1 H/ }: b* @: R
Canada’s oil capitals are headed for their first major housing correction since 2008, TD warns, k/ q* F8 t2 l8 w
Cenovus Energy Inc slashes staff by 15%, freezes pay in ‘challenging times for oil and gas industry’
X c# p5 ~5 L, F. uThe best oil traders in the business say this rout is not over- F$ [# {: N7 S3 ~+ O- r( M
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7 C/ M8 o/ O% y& B6 ?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./ X" v/ `+ [0 f7 G# |
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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.”( o; |% e9 C& F1 p3 M* u t( F! t0 V& s* Q
4 X; ^2 G7 c3 w# r& d# r. ?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.
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" E" K( r8 G" e: 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.
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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./ Z9 M' |/ K; p& f" T
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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.* W& l3 R3 k% R( K: C) F
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Meanwhile, the Canadian dollar closed near the US81￠ level.
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- M) ]8 d" ~% x1 u" }3 J# xThe 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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8 t) ~6 j* p2 J8 a z: b2 m! ^“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.2 [6 U9 a- R0 j1 O7 A0 ?
, h6 b' u/ g2 f2 o- ^ 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%.5 i! s9 ` G, U) v2 b: g, [0 H' \8 G
( l- E0 B. }" a" `“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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