Canada Economics Update Full effects of housing downturn yet to be felt The continued weakness of home sales suggests that March’s rebound in housing starts is unlikely to be sustained, while the subdued pace of house price inflation points to spending growth remaining... 11th April 2019 · 1 min read
Canada Economics Update Households vulnerable despite robust labour market Despite the strength of the labour market, the precarious condition of households’ finances suggests that consumer spending growth will continue to disappoint. 11th April 2019 · 1 min read
Canada Economics Update Policy not as loose as Poloz thinks The Bank of Canada’s belief that the policy rate is still far below its neutral level looks doubtful. In fact, market pricing implies monetary policy is as restrictive as it was on the eve of the... 2nd April 2019 · 1 min read
Canada Economics Update Equity loans won’t prevent construction downturn It will be at least 18 months before any meaningful boost to construction from the equity loan scheme is felt. In the meantime, the softness of new home sales means that new construction is set to... 20th March 2019 · 1 min read
Canada Economics Update Budget 2019 won’t drive pick-up in growth The modest increase in spending detailed in Canada’s 2019 federal budget does little to alter the economic outlook. The onus therefore remains on the Bank of Canada to support the economy. 20th March 2019 · 1 min read
Canada Economics Update Drop in wealth to weigh on spending growth Consumers’ housing wealth declined last year for the first time in over three decades. The modest fall is unlikely to cause a drop in consumption, but it does suggest that spending growth will remain... 18th March 2019 · 1 min read
Canada Economics Update Labour market slack growing beneath the surface Recent declines in hours worked suggest that, despite decent gains in employment, slack is building in the labour market. That, in turn, is likely to limit any acceleration in wage growth. 13th March 2019 · 1 min read
Canada Economics Update Bank of Canada drops pledge to hike further The Bank of Canada has finally pulled its head out of the sand and acknowledged that the deteriorating economy no longer justifies higher interest rates in the near term. Although the Bank still... 6th March 2019 · 1 min read
Canada Economics Update Oil rebound won’t prevent drop in energy investment The negative outlook for oil prices, together with Canadian oil firms’ high debt levels, regulatory uncertainty and capacity constraints, suggest that energy investment will fall this year. 5th March 2019 · 1 min read
Canada Economics Update No recession, but growth to remain weak Canada is not at immediate risk of recession, but the chance of GDP growth rising back above potential in the second half of the year looks slim. We now expect growth to average just 1.0% in 2019. 4th March 2019 · 1 min read
Canada Economics Update High inventories a downside risk to growth Against the backdrop of slowing global demand growth, the high level of manufacturing inventories in Canada is an underappreciated downside risk to GDP growth. 21st February 2019 · 1 min read
Canada Economics Update Changes to policy unlikely to rescue housing market There seems little chance of Canada’s banking regulator greatly easing the severity of the mortgage stress tests introduced last year, but the government is considering helping first-time buyers in... 11th February 2019 · 1 min read
Canada Economics Update Loonie’s strong run unlikely to be sustained A softening economy, slow wage growth and a drop back in oil prices are all reasons to doubt that the loonie’s recent strong run will be sustained. We see the currency declining to $0.72 this year. 6th February 2019 · 1 min read
Canada Economics Update Bank of Canada too optimistic on wage growth With wages boosted last year by minimum wage hikes and the labour market now facing several headwinds, we doubt that a meaningful pick-up in wage growth is on the cards for 2019. 5th February 2019 · 1 min read
Canada Economics Update Consumers unlikely to spend their gasoline windfall The drop in gasoline prices in recent months is good news for households’ purchasing power, but we doubt they will spend all of their windfall. In fact, limited scope for further strong house price... 29th January 2019 · 1 min read
Canada Economics Update Business cycle indicators point to slowdown risks With a host of indicators suggesting that GDP growth will weaken, we think that the risks of a pronounced slowdown are larger than either the Bank of Canada or the consensus assumes. 18th January 2019 · 1 min read
