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Alberta will sink into recession this year, as provincial fortunes turn amid oil’s collapse, CIBC predicts+ s7 a9 l. y0 t4 c* f
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Gordon Isfeld | February 17, 2015 | Last Updated: Feb 17 6:00 PM ET: G$ K! l/ R( b) G
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# ]$ D9 c2 F" ^% ~' \Last year Alberta lead Canada's growth, but the plunge in oil prices has turned the tables on the nation's energy giants.
* T& l" Q% {$ C; N, j# b% zBloombergLast year Alberta lead Canada's growth, but the plunge in oil prices has turned the tables on the nation's energy giants.4 p/ l+ n$ {8 z' D
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" n2 _3 ?, Z; S* `; X5 mOTTAWA — 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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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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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.”. b2 A0 I- _0 F( z! s& I
8 _3 T4 c. t" ^Most startling, perhaps, is the likelihood Alberta will go from the leading economic power house in 2014 to recessionary levels this year.1 |) |! U" O6 J1 L3 }) z7 {/ w
/ K" C8 o0 b: x9 N# H1 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.. W1 |& _7 C/ z* O4 [+ M
9 L5 _& \% C) yAs 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.. g- S( ]- Y; @' }2 u: 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%.* y0 N2 h" K( a7 w+ ?4 I, |! k' b
1 L& m* g# v3 M1 o2 f8 {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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Related, ^- I8 g! M; H. U. ~% B
Canada’s oil capitals are headed for their first major housing correction since 2008, TD warns/ Y6 R+ W a7 j
Cenovus Energy Inc slashes staff by 15%, freezes pay in ‘challenging times for oil and gas industry’* ^8 D+ ^% L# j
The best oil traders in the business say this rout is not over; p) j. Z& O _+ Q* Q( O3 J2 e
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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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4 M w& Y5 d) b“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.
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6 e+ A/ O' t7 b; K1 F) oCIBC 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.* {# O- K& z: c& j2 g. |' x& ^
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Contrast 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$53 on Tuesday, a gain on recent sessions.* A- [4 F3 O: a3 j! x1 U( B2 o8 A2 B
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Meanwhile, the Canadian dollar closed near the US81￠ level./ s" ` I/ w$ C1 w7 W& i
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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.& B2 J" @% x% b x+ X9 z/ P
$ v% z# Y. _4 j" X“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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9 I) I& y1 `: zTotal 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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