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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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Gordon Isfeld | February 17, 2015 | Last Updated: Feb 17 6:00 PM ET4 ~' ]% v* \" q* s6 s# F4 c
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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.. b7 l/ `1 t+ a% o( t* }1 h5 T
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.
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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.”
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; q! |+ E1 q) F% T/ r# LMost 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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* |: e2 w n7 q( H* r3 P“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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E$ {% f( V: } Q1 sHowever, Newfoundland and Labrador — also reliant on energy revenues — could contract more significantly this year, by 1.3%, and in 2016, by 1%.- c2 |# s( n S% V0 P- h7 S
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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.4 w" k7 C: F6 Z$ p( o; Y
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3 g( T0 \! Y0 i5 |) qCanada’s oil capitals are headed for their first major housing correction since 2008, TD warns- r" E" Z6 E: N0 ? _: u) Y
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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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$ p4 k% z( P3 W9 ~' b& S“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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$ d! {! q5 {, ?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./ o& Z6 A$ ]! N+ G) l7 v8 g$ ~3 g* N
. ]" R" ]$ s' n% y4 P+ jCIBC 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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4 @- S' \! ~3 N" k0 L8 JContrast 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 2010.8 G; B. Z& q" n# X
& E. b, q( K1 z( i' L( s0 J3 D& g8 EThe 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$53 on Tuesday, a gain on recent sessions.( C' Z( p! S2 D+ N1 b$ e
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; Y3 i3 o" M0 c6 y0 uThe 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. Q) H3 k; @5 }/ p% g
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“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.4 m6 l7 Z# B# W3 R: s: ?5 P# H
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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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7 P3 X$ v6 D0 Z1 I( }& I1 ~“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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