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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 ET: d+ }+ O. d" W
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4 w1 p5 E+ S0 C9 K3 p# C. tLast year Alberta lead Canada's growth, but the plunge in oil prices has turned the tables on the nation's energy giants.
1 }$ u" H& S n& IBloombergLast year Alberta lead Canada's growth, but the plunge in oil prices has turned the tables on the nation's energy giants.* ^, W+ b0 w/ s% u3 ~
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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.9 Q# U' W* q% D
0 T) r1 T$ }% W4 x/ i' d, c7 yIn 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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+ q0 z$ ~0 h: H$ d* G# E8 f“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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5 W4 J) @+ l' I+ }3 E9 p0 AAs 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.7 K' s/ H# f3 Q' H- s( A+ h3 b2 H, R2 p
; \1 S7 }. T" m' n$ j+ U# `* @However, Newfoundland and Labrador — also reliant on energy revenues — could contract more significantly this year, by 1.3%, and in 2016, by 1%.* p0 _& | C7 I* o K) G
: T2 P$ r0 i4 |/ T/ e. 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., `5 p5 P3 ^! ~+ z Y
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" |' ^) }+ T2 l- n2 E# uThe best oil traders in the business say this rout is not over
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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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) j/ P/ j6 v* E* O0 O“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.”6 `0 K( q# u& q7 C6 X1 Y* G9 d
9 G0 j$ t& g( N9 ~9 R! P1 \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.( K) D6 g$ K2 ?$ `+ ~( x5 O
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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.% r+ H9 I( X' b2 Q# T
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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.
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; j5 |/ i) \8 A6 @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$53 on Tuesday, a gain on recent sessions.4 J4 ]( [1 g/ a7 W4 o3 L( P7 ^
# _9 S( |% p% a$ e5 dMeanwhile, the Canadian dollar closed near the US81￠ level.
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- D, H: b( X7 p3 mThe 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.1 j( V9 L Y8 w( ^5 f0 Z) t
# h! Q( p8 ?+ M" [4 F“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.% R4 K% ^6 K' D
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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%.! S7 p3 a. v( C
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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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