Bank’s housing forecasts built on wrong foundations

The Bank of Canada’s forecasts for residential investment do not seem to account for the shift away from single-family to multi-family construction. That shift means it will take longer for...

29th July 2019 · 3 mins read

Last manufacturer standing

This week brought more gloomy news about the state of global manufacturing, which will make it even harder for the recent strength of the factory sector in Canada to be sustained.

26th July 2019 · 5 mins read

Oil sector to drag down third-quarter GDP

The latest oil production forecasts from the National Energy Board suggest that there are downside risks to our below-consensus forecast that GDP growth declined to 1.5% annualised in the third...

25th July 2019 · 3 mins read

Business Outlook Survey bucks weak trends elsewhere

The Bank of Canada’s latest Business Outlook Survey (BOS) suggests that firms have grown more confident in the outlook, with the future sales balance jumping to a two-year high. It seems to imply that...

24th July 2019 · 8 mins read

Higher non-bank lending highlights financial risks

Despite continued economic growth, a near-record low unemployment rate and still-positive house price inflation, borrowers are increasingly turning to lenders of last resort. That suggests the health...

19th July 2019 · 4 mins read

Retail Sales (May)

The late arrival of the warmer weather this year helps to explain the weakness of retail sales in May. The jump in consumer confidence in June appears to bode well, but we doubt retail sales will...

19th July 2019 · 3 mins read

Bank’s own forecasts point to looser policy

The Bank of Canada’s economic forecasts suggest it is closer to making a dovish tilt than is widely thought.

18th July 2019 · 3 mins read

Teranet House Prices (Jun.)

The sales-to-new listing ratio suggests that house price inflation will accelerate from June’s decade low of 0.5%, but further falls in house price inflation in Vancouver are likely to prevent a...

18th July 2019 · 2 mins read

Consumer Prices (Jun.) & Manufacturing Sales (May)

The 1.7% m/m rise in manufacturing volumes in May suggests that the economy had a stronger second-quarter performance than the Bank of Canada was expecting. Nevertheless, an average of the Bank’s...

17th July 2019 · 2 mins read

Bank of Canada at a crossroads

Given the recent run of stronger economic data, we thought the Bank of Canada might sound a cautiously optimistic note following its policy meeting this week, but the statement remained relatively...

12th July 2019 · 7 mins read

Housing starts to drop

It is inevitable that housing starts will drop back from June’s elevated level and we expect the decline over the next 12 months to be steeper than others anticipate.

11th July 2019 · 3 mins read

Bank’s forecasts show it is becoming more dovish

Although the tone of Bank of Canada’s monetary policy statement remained fairly neutral, its updated forecasts suggest that the Bank is losing faith in the economy’s short-term prospects. We continue...

10th July 2019 · 3 mins read

Growth to drop to just 1% in 2020

The economy is set to expand by a muted 1.3% in 2019 and only 1.0% in 2020. Faced with weak external demand, further declines in residential investment and subdued consumption growth, we expect the...

10th July 2019 · 20 mins read

Import data point to weaker domestic demand growth

The strong export performance in May was an encouraging sign, but the import data imply that investment fell back in the second quarter.

5th July 2019 · 3 mins read

Canada Data Response

Labour Force Survey (June)

The 2,200 decline in employment in June is not a concern given that the economy created an average of 50,000 jobs per month over the first five months of this year. That torrid pace was never...

5th July 2019 · 2 mins read