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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 ET9 T1 [/ a; A; r/ f/ j
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& n3 j' r5 {- V" N1 p1 oLast year Alberta lead Canada's growth, but the plunge in oil prices has turned the tables on the nation's energy giants.- v; H; ]# y: Q+ e
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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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.8 F' u3 h( A, B! f8 F1 t
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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.
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' u5 L* P7 r6 Z9 IIn 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.
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! j, t' m' }- C9 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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However, 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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7 u! ~9 D" i# H0 V" sIn 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.: t+ x3 K$ K3 B9 Y
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8 {/ G; A2 ]+ L F( U! oCanada’s oil capitals are headed for their first major housing correction since 2008, TD warns- Z0 L* a6 {$ l* P9 E; O, w. O/ K% J
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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.& f' m7 \' M+ k) G. V% P3 t
5 b( j0 _3 W7 X$ K( z% h, D N“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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3 A8 G) ~" V7 j" 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.6 c1 l4 Q- O! [- O/ X+ A/ L
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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.* O1 n5 ?* u8 |5 y" b
: Q/ a; O& F x8 c! oContrast 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 2010.9 t+ k5 A% ]' q. L4 D3 D
; P! A4 g$ u3 _- K! H, J5 C4 kThe 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$53 on Tuesday, a gain on recent sessions.9 D, u$ _9 f9 | M: K {
; Q" U) t, P2 C# N( Y" L7 A1 s9 fMeanwhile, the Canadian dollar closed near the US81￠ level.7 N3 \; s: g, u) O7 C
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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.% x" b0 ~4 C- b# r6 J G0 U
3 O2 @4 A S; F1 s, k“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.! o; C) G2 u7 b* H4 Q% ?4 a x
9 @8 l/ h7 h& B4 X: o0 [. ETotal 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%.
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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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