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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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1 x. e7 t6 u& v2 a3 j) X: uGordon Isfeld | February 17, 2015 | Last Updated: Feb 17 6:00 PM ET- S) }: i" Y4 `) h+ H' [
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Last year Alberta lead Canada's growth, but the plunge in oil prices has turned the tables on the nation's energy giants.% ^3 B4 P1 Q; |( ]" {- N
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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2 G6 D4 S2 g1 F+ t. ~# 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.2 }$ O L: O3 v9 A3 o0 }
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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.”) [; ]/ X! z; X) g$ b% D
+ V* `( Q5 C5 F: VMost startling, perhaps, is the likelihood Alberta will go from the leading economic power house in 2014 to recessionary levels this year., R( B& u* \9 `; ^, Q: p/ P
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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.. N& a+ U3 D9 e z
0 ?% V' A: z0 S4 r4 U! BAs 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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9 I0 ^/ s9 |3 @- {$ v" j2 D& bHowever, Newfoundland and Labrador — also reliant on energy revenues — could contract more significantly this year, by 1.3%, and in 2016, by 1%.2 k& R! r! {: j; k: N+ x
0 M+ z- m, X, n( a+ q* Q/ aIn 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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Canada’s oil capitals are headed for their first major housing correction since 2008, TD warns
0 D; w# n& m- _, t% uCenovus Energy Inc slashes staff by 15%, freezes pay in ‘challenging times for oil and gas industry’( G$ W, R4 q) M0 g; z4 j1 v
The best oil traders in the business say this rout is not over
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' Q: e2 d @8 X P ]& M# qThe 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.”
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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.$ |9 k( I2 d I: M
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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.: K" S% e: A9 l: C
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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 2010.1 j: I7 S- \' z
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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$53 on Tuesday, a gain on recent sessions.% m/ v9 ]/ f& W) L ?" D
% b% E& ?6 h8 T1 DMeanwhile, the Canadian dollar closed near the US81￠ level.) N' E% o: _6 I% N
, U* B& Z$ y% KThe 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/ z' _% F% _7 y7 w3 B
( l) J: O5 A0 ]& N: P1 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.
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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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^% U5 O# u: ^" g9 [0 ?% @“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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