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Alberta will sink into recession this year, as provincial fortunes turn amid oil’s collapse, CIBC predicts# y/ a1 F" i5 b2 O
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Gordon Isfeld | February 17, 2015 | Last Updated: Feb 17 6:00 PM ET+ o h, m) V8 w# T) y. B
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, ^% Z* f, x1 l+ f% `/ U0 RLast year Alberta lead Canada's growth, but the plunge in oil prices has turned the tables on the nation's energy giants.; V& y) }% q; l8 Y$ K- W* C x: G
BloombergLast year Alberta lead Canada's growth, but the plunge in oil prices has turned the tables on the nation's energy giants.5 m: K3 |1 E4 G1 B5 B: b
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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.' G) m) W- v1 |& @% C' D
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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 d8 A5 G) c; N8 G1 E; D
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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.”" Q+ }/ |/ f) p" r0 u' {
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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.$ v% I. C" h2 F/ n. p0 q$ k) J
7 [. E. n# I$ M. I; P$ RAs 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%.( G% C$ j; ~. P
. c9 U" U* r% |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.+ M& J7 ?. \, j$ L
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p J" h: K: B+ gCanada’s oil capitals are headed for their first major housing correction since 2008, TD warns
Z T0 {, i& `' ~4 N8 Q, eCenovus Energy Inc slashes staff by 15%, freezes pay in ‘challenging times for oil and gas industry’
0 r/ V% l6 x5 q) Q1 RThe best oil traders in the business say this rout is not over% a. F. G6 F; T9 f
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+ \* K1 n/ A. p& rThe 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.”" a9 e+ l9 n2 }! Z
" R: i9 R( w- A; _: U/ J9 }# KFor 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# S& | I6 p- W) \/ }
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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.4 r0 r7 ~0 Y# s. C, i
3 V* @" i$ t) |! x2 eContrast 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.
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Meanwhile, the Canadian dollar closed near the US81￠ level., G, S j+ H* P# ]+ Y/ g
- ?# U8 b3 W& M3 m! WThe 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.9 }% L4 ?0 s( g* _
* |9 t! Q- o( V3 ^0 fTotal 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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9 {: |# j( f* d9 B1 K“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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