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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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6 C: g% x- R: B+ p0 U# hGordon Isfeld | February 17, 2015 | Last Updated: Feb 17 6:00 PM ET; P5 ^1 q! @$ I( e% O
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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.
; J" ~0 I5 s) rBloombergLast year Alberta lead Canada's growth, but the plunge in oil prices has turned the tables on the nation's energy giants.3 F# \! |9 x! M
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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.9 N) h+ h4 m9 z( n2 K! H- |7 B7 S+ }
: t5 F5 C' y% W( k5 LThat 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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$ |# r: a7 W# g7 y! D7 q! x: rIn 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.”8 y; o8 q) I/ h1 D# n
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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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. d% r3 u: A% A4 C& c; k7 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.
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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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' n8 M a# T/ J# s1 K$ ZHowever, 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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: t/ d+ R+ e& o4 v: nIn 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.8 C1 C. C; K/ {1 |* E* {" l" F
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Canada’s oil capitals are headed for their first major housing correction since 2008, TD warns- F. D+ }6 U# F- V5 R1 n1 j1 s
Cenovus Energy Inc slashes staff by 15%, freezes pay in ‘challenging times for oil and gas industry’2 w! Z! \" g/ L# l5 h, ~
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.
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2 p7 y& G+ S f1 t. V/ z! ]“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.”1 b8 @0 z1 I; t3 z* v$ [! O7 D" y; S
/ n6 b" W Y6 W2 a4 tFor 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.4 B6 w7 e8 b8 P3 J9 k2 `7 R
9 y0 Q# i9 k" `& NCIBC 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.' A6 d3 M4 X* g1 k7 K- u
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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 2010.3 S+ c. P% T& S+ V- X$ b
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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$53 on Tuesday, a gain on recent sessions.
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Meanwhile, the Canadian dollar closed near the US81￠ level.* }; ^& w, c, Q8 O' a6 A+ Z5 m
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The regional shift is also evident in the housing market, where the slowdown in Calgary and Edmonton helped pull down national sales by 3.1% in January from December and by 2% from a year earlier, the Canadian Real Estate Association said Tuesday.3 k' }0 k+ ]4 L
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“As expected, consumer confidence in the Prairies has declined and moved a number of potential homebuyers to the sidelines as a result,” CREA president Beth Crosbie said.9 t$ G; W% A& 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%.6 O3 _4 j# K1 ^% t/ E; W, ^4 F
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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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