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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 V. K+ z" _% R" ?& v9 ?0 GGordon Isfeld | February 17, 2015 | Last Updated: Feb 17 6:00 PM ET
9 N# ~/ ]# K4 jMore from Gordon Isfeld, q Q! U$ \; Z9 C1 e9 I
Last year Alberta lead Canada's growth, but the plunge in oil prices has turned the tables on the nation's energy giants.
* f- u, \0 b4 f, N2 m. w2 A; LBloombergLast year Alberta lead Canada's growth, but the plunge in oil prices has turned the tables on the nation's energy giants.! e* G( P0 R7 i2 f
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8 ~" a& I8 v3 ]( y6 zOTTAWA — 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.4 T' j! v( G- l" z7 U! b+ b
7 O9 H* P) R( SThat 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.$ `" b7 |# `. x5 A
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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.* Q" u, X) H; U$ \
" B# S% z3 _1 d( X3 f0 c9 a9 ?* i! N“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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. I2 r, e% r$ D3 KHowever, 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.8 ?& f+ e! S3 J9 d- ^
7 J& @2 }% w/ h) y& n3 QRelated# g" A' |& |; q& x* @$ I, Q
Canada’s oil capitals are headed for their first major housing correction since 2008, TD warns
9 |& m0 d$ E7 s2 N6 a$ tCenovus Energy Inc slashes staff by 15%, freezes pay in ‘challenging times for oil and gas industry’
R8 M0 G5 [1 L# E$ {( _5 lThe best oil traders in the business say this rout is not over
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, I0 i+ ^# w& v! ?' CThe 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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“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.”! G2 U w; o ]9 G4 r' s% T4 _
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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.
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) o' l/ X- u! s. b% ^CIBC 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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4 ~9 N0 d, v9 x! ^' U7 { B7 kContrast 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 2010.6 } S4 z6 ]; Y9 X- e
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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$53 on Tuesday, a gain on recent sessions.
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Meanwhile, the Canadian dollar closed near the US81￠ level.
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The regional shift is also evident in the housing market, where the slowdown in Calgary and Edmonton helped pull down national sales by 3.1% in January from December and by 2% from a year earlier, the Canadian Real Estate Association said Tuesday.# ?) H7 w- a2 {$ O
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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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& j1 S8 y W2 |+ t, q2 lTotal 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%. n; Y/ S* y3 B4 T1 \
8 }( S, H" G0 O$ v. U# C. I“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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