Canadian Economic Outlook

August 28, 2008

Expect renovation spending to downshift over the next two years

Slowing sales of existing homes will probably cause renovation spending to cool in 2008 and 2009 following an unprecedented eight years of sustained strong growth.

August 28, 2008

Regional housing strength shifts to the east

The regional housing market in Canada has altered considerably versus the pattern of the last several years.

August 27, 2008

Canada’s housing starts plunge in July

Canada Mortgage and Housing Corporation has announced a sharp pull-back in housing starts in the latest month, to 187,000 units (seasonally adjusted at an annual rate) in July, 2008 versus 216,000 units in June.

August 26, 2008

Manitoba’s near-term economic prospects are among the best in Canada

As it heads into the second half of 2008, the Manitoba economy definitely has a lot of momentum.

August 25, 2008

Droop in commodity prices raises prospects for equities

A number of analysts are speculating that July may have seen the low point for stocks in this cycle.

August 21, 2008

Now that non-residential construction costs have hit a 25-year high, what’s next?

Non-residential construction costs in Canada’s seven largest census metro areas (CMAs) increased by 11.6% year over year in second-quarter 2008.

August 20, 2008

Price increases leading to stagflation continue to haunt U.S. and Canada

According to Statistics Canada, the year-over-year all-items inflation rate in Canada in June 2008 jumped to 3.1%, its highest level since September 2005.

August 19, 2008

Canadian construction job market should remain somewhat tight into 2009

While the total value of building permits fell by 5.3% month over month in June 2008, they were actually up by 13.1% quarter over quarter for the second quarter of 2008 as a whole.

August 18, 2008

Canada’s trade surplus stayed strong in May – three major influences on exports

Canada’s foreign trade surplus in goods stayed strong at $66.4 billion annualized in May 2008, according to the latest numbers from Statistics Canada. Export growth ( 5.4%) month to month was well ahead of imports ( 3.9%).

August 14, 2008

Toronto’s prospects look good for now, but challenges lie ahead

Recently, Forbes Magazine and the Fraser Institute have focussed quite a bit of attention on Toronto’s long-term prospects.

August 13, 2008

Motor vehicle sales are driving into some potholes

New and used motor vehicle retail sales in Canada were down slightly (-0.9%) on a three-month “smoothed” year-over-year basis in May 2008.

August 12, 2008

Cap and trade: Effective policy or just every bureaucrat’s dream?

On June 2, 2008, the provinces of Ontario and Québec announced that they were planning to introduce a “cap-and-trade” system in order to try and stop climate change.

August 11, 2008

Retail sales show that motorists are altering their behaviour

Analysts watch retail sales closely because they are a prime indicator of what to expect from consumer spending in the national accounts.

August 7, 2008

Consumers flex their purchasing power even as GDP numbers weaken

The recently released statistics on the growth— or more accurately the lack of growth — of Canada’s gross domestic product (GDP) in May caused some analysts to, once again, start using the “R” (recession) word to describe the state of the economy.

August 6, 2008

Some disturbing trends in the latest employment numbers

The U.S. consumer is being plagued by falling house prices, the high cost of gasoline and tighter credit.

August 5, 2008

Sustained investment should underpin New Brunswick’s growth in 2008-2009

As the New Brunswick economy heads into the second half of this year, it appears to be shifting to a lower gear.

August 1, 2008

The heyday is over for construction employment

Construction employment (+7.7%) in Canada has had its heyday and is set for declines ahead on a year-over-year basis. Slowing growth in the economy will cut into residential construction to a considerable degree and non-residential to a lesser degree. Residential work (both new and renovation) accounts for about forty percent of all construction.

July 31, 2008

Biofuels: Seldom is so much spent to achieve so little

Late in 2007, we here at the Economic Snapshot revisited the topic of biofuels and reviewed a brief analysis by the Organisation for Economic Cooperation and Development (OECD), which questioned whether the cost of producing biofuels outweighed the benefits.

July 30, 2008

Service sector job growth in Canada is tracking the U.S. downward

The first graph below shows that total employment growth in Canada has remained much stronger than in the United States for more than a year-and-a-half

July 28, 2008

Accept it – the bias for interest rates is upward

On July 15, 2008, the Bank of Canada left its key policy-setting interest rate, the target overnight rate, unchanged at 3.00%.