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Alberta will sink into recession this year, as provincial fortunes turn amid oil’s collapse, CIBC predicts8 j% o' F( Y. u& }+ k( d/ x [; @1 I1 J
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Gordon Isfeld | February 17, 2015 | Last Updated: Feb 17 6:00 PM ET3 i6 B, _* k* B+ c7 p1 v: Q$ @
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2 E& d0 n& P/ W( }; X( c9 Z3 \Last year Alberta lead Canada's growth, but the plunge in oil prices has turned the tables on the nation's energy giants.
: ?" F* `' S$ d [- u, y8 y; @/ e' oBloombergLast 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.
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, h" v0 j- J2 lThat 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.! A. q0 M! v+ o# X: V% \! b' X
5 D7 o1 @; \. O+ ?+ i0 b# P! Z6 |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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& i$ K! `/ g% x$ \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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As 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%.7 v; w G- l" t1 C. ~8 E/ ?4 {; p
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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.& v7 v) k+ k- ~
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, c; n) v. r2 {* o- W% Q! b# _Cenovus Energy Inc slashes staff by 15%, freezes pay in ‘challenging times for oil and gas industry’; w* m0 S/ B: z2 n9 [. t' I4 l
The best oil traders in the business say this rout is not over
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/ e) r( X7 M8 W J2 x& 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.6 A5 ]# j5 R! |+ Y, y
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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.”8 c4 [1 n3 j. Y( X
- C: `7 h) K# C1 g2 JFor 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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( q* ]% g1 Z5 R; r, e9 {% RCIBC 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 c/ Z; `- ^2 {* T$ o* C0 ~* d, m+ c
+ h+ q4 ^* C7 b B' |! @; AContrast 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$53 on Tuesday, a gain on recent sessions.4 `9 Q% E% a+ i J; c: q( N* _
# I* }& ?8 }7 g' k/ K: I$ FMeanwhile, the Canadian dollar closed near the US81￠ level.
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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.
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3 |7 F' f" n% e7 H“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.9 T2 r3 x% Z7 |# o# x
/ [2 u2 j- H! y9 j9 v5 b- Y8 V+ \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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