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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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: g' V% x6 @) C! \Gordon Isfeld | February 17, 2015 | Last Updated: Feb 17 6:00 PM ET
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. v( U0 O. ?# b4 b P$ zLast year Alberta lead Canada's growth, but the plunge in oil prices has turned the tables on the nation's energy giants.
. n5 S( n, c! q1 wBloombergLast year Alberta lead Canada's growth, but the plunge in oil prices has turned the tables on the nation's energy giants.* G |: }: j. `* |4 f# T
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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.
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7 N9 T$ M/ v) d+ H* X+ U2 ?1 u" D' 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." f k4 i. L; Q% ~& D+ m- n& X+ o* Z
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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.
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7 s( K: b! @7 v- S! K) W. J9 c“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." U/ y% D, N! b0 x* g% }
: e6 }% Y5 z& X2 Y' {, EAs 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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! S" {$ l$ k) D3 G4 [) {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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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.6 R7 q# V+ Y; g" L! g Q5 d: ]$ A+ t
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5 A( \3 e! d$ m' @8 B, OThe 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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# U& t( [7 d3 C, {“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.”0 z; O0 G/ |9 L
& x% u, X* o6 V9 b2 x+ OFor 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.; e! o% M( k- V. H- J1 d
: x6 N5 z/ V a; l* fCIBC 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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, s. p9 G; V* i0 m% H: a1 cContrast 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.* ]4 R q1 p! Q5 Z7 x# e# s
! Y$ T5 B' c8 M3 HThe 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$53 on Tuesday, a gain on recent sessions.4 ?" e* M' j2 p. E) a6 A2 {! @4 A
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Meanwhile, the Canadian dollar closed near the US81￠ level.2 r* A. n D+ {
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The regional shift is also evident in the housing market, where the slowdown in Calgary and Edmonton helped pull down national sales by 3.1% in January from December and by 2% from a year earlier, the Canadian Real Estate Association said Tuesday." A9 V9 p) Z; Q# _+ e& ~: z4 s4 ]
2 P8 b R2 Y9 ?“As expected, consumer confidence in the Prairies has declined and moved a number of potential homebuyers to the sidelines as a result,” CREA president Beth Crosbie said.- @$ H* K% F1 S; i
+ F8 C7 r9 u2 z) [- |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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# c1 b9 G3 d0 y- @( \# o“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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