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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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2 |! r8 [0 S- L) w; c, Q; s8 GGordon Isfeld | February 17, 2015 | Last Updated: Feb 17 6:00 PM ET) o! R+ v: U, n, L4 W
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( x7 U8 h- L$ ~( j0 p5 W) x- Q uLast year Alberta lead Canada's growth, but the plunge in oil prices has turned the tables on the nation's energy giants.
; g; I$ D8 a. W0 R8 BBloombergLast 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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& Y& w. D1 ]) C( S1 l! SOTTAWA — 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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) s: J. S0 M, `7 u0 bThat 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.0 c8 h. G K( ]. z9 |$ X; m6 @
' _+ L m+ e9 T2 m9 gIn 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.”4 N, t/ V' l3 d
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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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$ k% Y1 A$ W h8 I% o“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% `: |, z/ Z
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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." n6 q& y" L5 S; m
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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%.+ P4 l ~0 r0 J) B ]7 d p; s
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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.% C, T0 a% U1 m3 e! G
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, P& t! k) ?" O5 R; o3 e' \Cenovus Energy Inc slashes staff by 15%, freezes pay in ‘challenging times for oil and gas industry’
& }9 w# \+ U8 A. Z$ a8 }The best oil traders in the business say this rout is not over$ A% x( n$ I1 r7 {, i0 P' ]/ |- \7 B
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: d' {3 q3 _/ V9 `8 \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.2 O2 V: o5 N% t0 l8 t- P
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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.”3 ]1 l+ u) A) n7 U# z% U; p7 O
+ S# m+ D6 x" _7 f3 B/ ?& {+ ~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.8 S+ t5 @, g/ N- D% C
0 z2 t1 T5 c2 }6 l5 l% L) LCIBC 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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; o/ I9 E% F6 dContrast 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.# y7 E3 E6 B( B7 `
8 D& n C6 \1 I' {$ q% k" G7 lThe 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.7 Z% e1 V& Y0 U
% `; H" V% X3 q5 y* o6 EMeanwhile, 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.+ H2 c; L7 B d+ q% @0 u" d
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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.8 V9 h" ?+ q2 G) v! B
. B5 m3 d+ l3 m) uTotal 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%." M# v- Y; M+ b2 x5 P- | r
: {) F4 S5 V5 R; @. ?“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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