Filtered by Subscriptions: Canada Economics Use setting Canada Economics
The US government shutdown should not have a material negative impact on Canada's economy. But if this political deadlock is any indication of how US policymakers will handle the much more important negotiations over raising the debt ceiling later this …
1st October 2013
Canada's robust 0.6% m/m rebound in July suggests that the economy had more momentum at the start of the third quarter than we had previously thought. Accordingly, it now looks like the economy grew by closer to 2.0% annualised. … GDP by Industry …
30th September 2013
The household spending splurge that prevented what would have otherwise been a poor economic showing last quarter may have been repeated this quarter. Although higher prices of food and transportation this quarter suggest that households had considerably …
In spite of the modest drop back in September, the CFIB's small business confidence suggests that annualised GDP growth in the third quarter is likely to match second-quarter’s 1.7% gain. This suggests some upside risk to our current forecast of a 1.0% …
26th September 2013
At slightly more than 2.0%, the latest consensus forecast for third-quarter annualised GDP growth looks too strong to us. Partly because of large negative carry-over effects from the second quarter, we expect third-quarter GDP growth to be nearer to 1.0%. …
25th September 2013
The recovery in July's retail sales volumes confirms that the economy rebounded from the dip in June. We suspect that GDP rebounded by 0.3% m/m in July, although we still think that GDP growth for the third quarter as a whole will be a modest 1.0% …
24th September 2013
We think the Bank of Canada Governor's recent postulation about the economy turning the corner is misplaced. The recent weakness in merchandise exports, excess capacity utilisation and manufacturing orders continue to suggest that an export-led recovery …
23rd September 2013
The increased slack in the economy kept underlying inflation under wraps in August. With economic growth likely to remain sluggish through the rest of this year and inflation expectations well anchored, it will be a long time before capacity or wage cost …
20th September 2013
Governor Stephen Poloz's speech today indicated that that the Bank of Canada is doubling-down on its earlier bet that the economy is poised for a comeback, led by a rebound in exports and then business investment. Unfortunately, there is little evidence …
18th September 2013
New Zealand’s economy slowed in Q2, as drought hit agricultural and manufacturing production. However, there were encouraging signs of improvement in other areas of the economy, which bodes well for recovery over the coming quarters. … Bank of Canada's …
The robust rebound in manufacturing sales volumes suggest that GDP likely rebounded by 0.3% m/m in July. That suggests the economy began the third quarter on a solid footing, but the weak end to the second quarter means that third-quarter GDP growth will …
17th September 2013
The third and final wave of data from Statistics Canada's National Household Survey (NHS) published last week reveal that the Canadian home ownership rate surpassed the record peak at the height of the US housing bubble. … Canada's home ownership fling …
16th September 2013
The latest pick-up in house price inflation is consistent with the reported rebound in existing home sales. But as mortgage rates continue to rise, we expect falling home sales will eventually result in a renewed house price disinflation, before outright …
12th September 2013
Restrictive mortgage rules and rising fixed mortgage rates suggest that the slowdown in household credit growth is likely to persist. Meanwhile, trends in business sector credit growth suggest that business confidence might be improving, with …
11th September 2013
Housing investment might continue to support GDP growth over the second half of this year, but there are still tentative signs that a day of reckoning lies around the corner, with housing likely to become a significant drag on growth next year. … …
10th September 2013
We expect the recent depreciation of the Canadian dollar to be followed by another downward leg before year-end. While improving global economic conditions and buoyant commodity prices will help to limit this depreciation, domestic economic weakness and …
9th September 2013
The surprisingly robust 59,200 rebound in employment in August, following declines over the prior two months, wasn't quite as good as it looks because that gain owed a lot to a surge in part-time jobs for older workers. The moderate pace of job creation …
6th September 2013
Following disruptions to energy output in the second half of last year, Canada's economy rebounded over the first half of this year, posting GDP growth of 2.2% and 1.7% annualised in the first and second quarters respectively. But with only modest impetus …
5th September 2013
Although the Bank of Canada retained its tightening bias word for word, it now admits that the continuing weakness in exports and investment mean hopes of a smooth 'rotation in demand' look less promising than before. This new dovish admission hints that …
4th September 2013
July's discouraging decline in export volumes adds to our concern that Canada is not fully benefitting from the gradually improving US economy. With export competitiveness challenges likely to persist, the Bank of Canada's export-led recovery could face …
Those hoping that the expected pick-up in US domestic demand growth will drive an export-led recovery in Canada are likely to be disappointed. Over the past decade, Canadian firms have suffered a dramatic loss of competitiveness relative to US firms. …
30th August 2013
The moderate slowdown in GDP growth to 1.7% annualised in the second quarter, from 2.2% in the first, is encouraging given the impact of the flooding in Alberta and the construction strike in Quebec. … GDP (Q2 …
Another rise in the CFIB's small business confidence in August suggests that firms continue to expect GDP growth to pick up in the third quarter, from our estimated 1.5% annualised in the second. (Data due tomorrow.) A further drop back in hiring …
29th August 2013
The Bank of Canada is unlikely to make any major changes in its upcoming policy announcement next Wednesday (4th September), but the recent surge in Canadian long-term interest rates could prompt the new Governor Stephen Poloz to introduce some stronger …
28th August 2013
Canada's economy contracted sharply at the end of the second quarter, but only partly because of one-off factors related to severe floods and a brief labour strike. For the second quarter as a whole, stronger household consumption and housing investment …
26th August 2013
July's subdued inflation figures are consistent with an economy growing below potential, which will only reinforce the Bank of Canada's reluctance to raise rates anytime soon. With growth expected to remain sluggish this year and next, it will be a long …
23rd August 2013
The rebound in domestic crude oil prices over the first half of this year has improved the outlook for Canadian business investment. Overall, this suggests some upside risk to GDP outlook of 1.5% in 2013 and 1.0% in 2014. … Favourable oil prices could …
22nd August 2013
June's 1.2% m/m decline in retail sales volumes, which only partially reversed the 1.9% m/m gain in the month before, confirms that, over the second quarter as a whole, household consumption growth rebounded. Nevertheless, the June decline supports our …
Canada's trade with the euro-zone is small, so any sustained European recovery would provide only modest support to Canadian export growth. That said, there are a few industries that might benefit more notably, such as aerospace, which could support much …
19th August 2013
Despite a strong rebound in petroleum refining, June's surprising 1.3% m/m decline in manufacturing sales volumes, which wasn't related to the floods in Alberta, suggests that second-quarter GDP growth probably slowed to between 1.0% and 1.5% annualised. …
16th August 2013
The recent uptick in existing homes sales most likely reflects a rush by home buyers to complete deals before mortgage rates rise further. However, this has only pulled forward sales that would have happened later this year and next. Under these …
15th August 2013
The continued deceleration in house price inflation across most major cities in July is broadly consistent with the past slowdown in home sales. As demand and supply imbalances continue to intensify this year and next, we still anticipate that house …
14th August 2013
The latest slowdown in hourly earnings provides further evidence that underlying inflation is likely to remain close to the lower bound of the Bank of Canada's target range of 1% to 3%. This supports our view that the Bank will refrain from raising …
13th August 2013
While housing starts have displayed some surprising resilience over the past several months, which would seem to support the consensus view that the housing market is enjoying a soft landing, more timely data shows that new housing demand has slumped to …
12th August 2013
July's surprising 39,400 decline in employment looks bad but, since it mainly reflects less hiring of younger workers this summer, the Bank of Canada should view it as a temporary shock that will be unwound after the Labour Day holiday. Nevertheless, the …
9th August 2013
Canada's export growth slowed to around 2.0% annualised in the second quarter, from just over 6.0% in the first quarter, which would seem to refute hopes of an export-led pick-up in economic growth. Admittedly, with import growth slowing too, net exports …
7th August 2013
June's 1.5% m/m rebound in export volumes and further contraction in imports are further evidence that the economy lost momentum in the second quarter. This supports our view that the economy grew by less than its potential 2% annualised growth pace. … …
6th August 2013
Canadian manufacturing production is being hampered by sluggish foreign demand and, to a lesser extent, moderating domestic demand. While gradually improving US demand is providing much needed support, feeble overseas demand is unfortunately offsetting …
5th August 2013
Canada's economy regained some lost momentum mid-way through the last quarter, with real GDP expanding by 0.2% m/m in May. (See Chart.) Taking into consideration the likely weakness in June's GDP due to the major flooding in Western Canada, we still …
31st July 2013
The anticipated slump in potash prices should have only a minor impact on Canada's economy. Potash mining represents a tiny share of Canada's GDP and exports. Moreover, the relatively lower cost of production in Canada means that the country's miners are …
30th July 2013
Canada's economy is poised for a long period of slow growth, as the mining investment boom simmers down and other parts of the economy such as housing or exports are either over-extended or growing too slowly to pick-up the slack. After expanding by 1.5% …
The evidence suggests that, after a paltry 0.9% annualised in the first quarter, second-quarter real consumption growth accelerated to 3.0% annualised. Unfortunately, we suspect that consumption growth will drop back in the second half of the year. …
26th July 2013
The uptick in the CFIB's small and medium-sized business confidence in July suggests that third-quarter GDP might rise by as much as 2.0% annualised. The details behind this optimism, however, appear tentative. Overall, we still expect the economy to …
25th July 2013
The robust 1.9% m/m gain in May's retail sales volumes, together with earlier reports showing strong increases in manufacturing and wholesale trade, suggest that the economy grew by as much as 0.4% in May. This suggests that the risks to our estimate that …
23rd July 2013
We think the Bank of Canada has over-estimated the negative impacts on second-quarter GDP from Alberta's recent major flood and Quebec's construction labour strike. Instead of 1.0% annualised, we estimate that the economy grew by 1.5% in the second …
22nd July 2013
The modest increase in the official core inflation figure in June, to 1.3% from 1.1% in the month before, was mainly due to specific base-year effects. We expect underlying inflation to stay at the bottom of the Bank of Canada's 1-3% target range as …
19th July 2013
Although the Bank of Canada held its view that the economy will soon accelerate and that interest rates will eventually rise, several dovish tweaks to its policy statement suggest even more strongly than before that it is in no hurry to tighten policy. We …
17th July 2013
The 0.7% m/m rise in manufacturing sales volumes suggests that GDP growth in May might have been higher than 0.1% m/m. As a result, the risks to our forecast that second-quarter GDP will rise by 1.5% annualised now lie to the upside. … Survey of …
16th July 2013
Canada should weather China's economic slowdown relatively well, with fairly minor consequences for economic growth. Since China represents a fairly small share of Canada's total exports, any slowdown there is likely to be more than offset anyway by …
15th July 2013
Despite stronger economic data, there are good reasons to expect a more supportive policy statement next week. Although the new Governor Stephen Poloz has said nothing recently that indicates the Bank will drop its tightening bias, rising market rate …
10th July 2013
