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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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* F: _$ J. k7 v% k' HGordon Isfeld | February 17, 2015 | Last Updated: Feb 17 6:00 PM ET" {9 o2 V- c+ s# y" n* V, c/ u
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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.
6 s6 }" c o t8 t M1 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./ O- B+ f4 D5 q* u) ]! U* F
3 n/ P" y& v) n& WThat 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.”8 J1 U- u( h0 ^2 Z: }% h
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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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“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.* e& I7 p# |9 J& `% L
9 Q5 [3 C/ {2 f; m/ x# kAs 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.5 X5 I A# j% s ~8 H- J: M
5 c0 G: [) m+ [+ v) Q" n3 m4 QHowever, Newfoundland and Labrador — also reliant on energy revenues — could contract more significantly this year, by 1.3%, and in 2016, by 1%.) b, ?4 L9 e; A3 d! j. e# O9 G
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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.% Q# s; P* a" _5 q' }9 K
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Canada’s oil capitals are headed for their first major housing correction since 2008, TD warns
5 X5 L2 x% T6 n m3 a* A, bCenovus Energy Inc slashes staff by 15%, freezes pay in ‘challenging times for oil and gas industry’* E- A, t/ m P5 e5 F/ q
The 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.) q8 h% V6 s: l/ ]+ q- a- {5 u( O6 q
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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.”4 u5 W4 z8 e% M& \
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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.$ S% ?( @' e1 R! k3 i
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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.
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( A2 ?0 Q V! K; I0 V& O% L) M+ NContrast 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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6 m1 [0 K6 n' h3 {! H9 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$53 on Tuesday, a gain on recent sessions., Z' w" h4 g/ [$ S- K$ o0 y
. W+ f& N/ U jMeanwhile, 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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“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.% @& p [/ w; ]3 B7 g. z) X
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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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3 Y v8 w+ w7 P5 ?; J! G“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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