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Alberta will sink into recession this year, as provincial fortunes turn amid oil’s collapse, CIBC predicts$ E4 K! _: v. m& c
0 {1 Q1 ?4 v4 o5 |Republish Reprint4 j2 I; A# s8 @" T
Gordon Isfeld | February 17, 2015 | Last Updated: Feb 17 6:00 PM ET# a3 [! m7 { o' c& {
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# P, G5 t; a) V$ a, _5 Y7 u( RLast year Alberta lead Canada's growth, but the plunge in oil prices has turned the tables on the nation's energy giants.
; ?$ v" X3 ~4 [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.5 Z! u# z% M' w7 E7 x: P& b4 b& w
( ?7 T$ P O! @3 C+ V& E$ R: JThat 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.! I" {, y# p; l1 ?
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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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4 G; r5 v6 I2 z+ S! z% ?! W- b8 qMost startling, perhaps, is the likelihood Alberta will go from the leading economic power house in 2014 to recessionary levels this year.0 i; J* T# b% d$ c' t
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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.# t8 ~0 z) F. o7 G( S% Y
- i( U) ?; j, A" u; MAs 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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1 W# H! v7 [' l0 kIn 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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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.# L$ D9 C' M J8 ^
$ {" l9 R- h$ ~“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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2 ]# ]% F- g! 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.
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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.6 S3 ?* d: @/ x7 y1 h5 n( i3 L9 a3 J
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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 2010.9 _# p2 d6 `+ {2 x D6 r
% l; J1 ~* J4 I0 g9 q# a. p' qThe 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.' h& [+ t: k7 R* ]
/ N& |9 u( O3 oMeanwhile, the Canadian dollar closed near the US81￠ level.: X8 @5 R: [6 D6 c% Y
5 j9 ~- |. W- g; [0 tThe 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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) i2 {+ t5 K1 M. y* ^& J0 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.
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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%.
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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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