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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; Q5 x8 t% R- o" ~. m0 C
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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; N5 q- r* N* S8 k: Z
BloombergLast 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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% l, K. K* [$ M6 i- l5 LOTTAWA — 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 Y1 b3 k' n! T# D/ 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 L/ a6 C8 ?4 O+ l! X7 F+ y
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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.”
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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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“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 2014.5 |3 i/ j6 `" [3 k2 b9 [
) T3 P$ w; W5 KAs 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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0 T5 ~( N! i: a/ [& r0 bHowever, 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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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.* v) _/ d- l2 ` Q. r
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/ |9 M4 H! k3 @. O3 ^& iThe best oil traders in the business say this rout is not over
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, j0 ?- b% g: |+ e& eThe 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.: D$ U% b( x4 K) t+ N
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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.”
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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.( Z# R# u2 v7 g/ K& n, p- \; A
, G2 F- l' {3 e. v7 c, 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.) v/ k! f0 E$ z. h& K% N ]9 g
+ t; z9 J0 q) V) [. mContrast 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., x) Z% c, u$ Y& i8 n4 Q! Y
1 S/ V4 i+ a0 _) TThe 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$53 on Tuesday, a gain on recent sessions.: j! i* R) [0 {6 ?; k0 ~( d% ~: o
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Meanwhile, the Canadian dollar closed near the US81￠ level.
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The regional shift is also evident in the housing market, where the slowdown in Calgary and Edmonton helped pull down national sales by 3.1% in January from December and by 2% from a year earlier, the Canadian Real Estate Association said Tuesday. h, c6 {! X' L0 x& @
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“As expected, consumer confidence in the Prairies has declined and moved a number of potential homebuyers to the sidelines as a result,” CREA president Beth Crosbie said.
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* \# l6 i* A/ \' Y# V; @4 e9 sTotal January residential sales in Calgary were down 35.5% from a year earlier, while Edmonton fell 22.7%, Saskatoon lost 24% and Regina was off 6.9%.5 T6 P$ @5 F4 o' r# S
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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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