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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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, }4 [9 h7 E, x8 W8 PGordon Isfeld | February 17, 2015 | Last Updated: Feb 17 6:00 PM ET
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1 I i" \/ ~- ^( eLast year Alberta lead Canada's growth, but the plunge in oil prices has turned the tables on the nation's energy giants.
/ D+ U( \$ F7 L% R! rBloombergLast year Alberta lead Canada's growth, but the plunge in oil prices has turned the tables on the nation's energy giants.4 B7 V+ m$ L1 {: r% T
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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.# Q8 t" u( s# c4 M X5 z+ M
" a6 |) j P2 c6 |. ]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.9 e9 M/ O$ Q& F' U" A# E
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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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8 O; N( Y5 x8 ?9 MMost startling, perhaps, is the likelihood Alberta will go from the leading economic power house in 2014 to recessionary levels this year.3 p2 d8 r5 w" h
0 A5 \4 U }5 Y6 T3 a& ^“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." v' j& R; b- Y6 ?& D
% p" j1 G( r4 a- n9 V' E0 x, X8 S8 XHowever, 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.
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. e' o8 H% T1 s. ?Related
, q& l' ~/ u* I @: X+ ^Canada’s oil capitals are headed for their first major housing correction since 2008, TD warns8 h; A5 ?) X1 E& \$ c9 _9 h
Cenovus Energy Inc slashes staff by 15%, freezes pay in ‘challenging times for oil and gas industry’
% ?3 X# ]% s2 E) Y- ^: UThe 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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& F" O/ K2 y3 x! ]“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.”/ W9 v3 B! W, L
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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( @3 j3 [ U7 i
6 ? o) I# b C4 U: C& ECIBC 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.* ?1 h7 A/ W3 I! v7 V4 a2 N" y9 G5 @
9 X6 j9 ?. u" f# R5 g6 b- @% X3 aContrast 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$53 on Tuesday, a gain on recent sessions.
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& e: t9 F: A# M5 o- h( FMeanwhile, the Canadian dollar closed near the US81￠ level. r: U: J; g* }) r
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The regional shift is also evident in the housing market, where the slowdown in Calgary and Edmonton helped pull down national sales by 3.1% in January from December and by 2% from a year earlier, the Canadian Real Estate Association said Tuesday.
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5 T" G9 X0 E" V“As expected, consumer confidence in the Prairies has declined and moved a number of potential homebuyers to the sidelines as a result,” CREA president Beth Crosbie said.5 x4 x7 P9 k; _: e
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Total January residential sales in Calgary were down 35.5% from a year earlier, while Edmonton fell 22.7%, Saskatoon lost 24% and Regina was off 6.9%.2 T. m1 C6 t8 q
+ J9 x4 c$ L$ k# D4 _ E s“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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