Canadian Economic Outlook

January 6, 2009

Taxes continued to dominate household expenditures in 2007

In 2007, the average Canadian household spent a total of $69,950. According to Statistics Canada’s most recent Survey of Household Spending,this figure was 3.3% higher than it was in 2006.

January 5, 2009

Some regional housing markets show the strain

Two of the more interesting regional numbers among CMHC’s November housing starts pertain to the multiples markets in Toronto and Calgary. Those two centres have accounted for the nationwide strength in multiples (+11%) so far this year. Toronto is +61% year to date and Calgary is +26%. However, in the individual month of November, Toronto multiple-unit starts declined by nearly one-quarter versus their average through all of the earlier months of this year. In Calgary, the November multiples change was an even more dramatic two-thirds drop.

December 30, 2008

Employment growth slows but doesn’t stall (yet)

Two recent surveys of employment prospects in Canada suggest that, while hiring prospects have cooled significantly over the past few months, they have not collapsed.

December 30, 2008

Inflation may look dead, but it’s probably just sleeping

At first glance, the fact that the headline inflation rate in Canada declined from 2.5% to 2.0% suggests that inflationary pressure in Canada is cooling.

December 29, 2008

Canada’s housing market: Losing its foundation

According to Canada Mortgage and Housing Corporation (CMHC), housing starts in Canada in November sank to a level (172,000 units seasonally adjusted at an annual rate) that has not been seen since late 2001. From January 2002 through October of this year, housing starts had averaged over 220,000 units per month. The November figure is a dramatic decline, but it still pales by comparison with what has been happening in the United States. U.S. starts are now down around the 800,000-unit level, which translates to a Canadian equivalency figure of about only 80,000 units.

December 23, 2008

December 22, 2008

Full-time, part-time, private and public labour markets all come into alignment

As Canada’s labour markets deteriorate, four of the key sub-market indicators have all come into alignment.

December 18, 2008

Record-low capacity utilization points to weak business investment in 2009-2010

According to Statistics Canada, the industrial capacity utilization rate in Canada has fallen to its lowest level since the agency started to compile this information in 1987.

December 17, 2008

The Bank of Canada’s heroic fight against deflation

On December 9th, the Bank of Canada (BOC) aggressively lowered the target overnight rate by 75 basis points (100 basis points = 1.00%). The Bank’s key policy-setting rate now stands at 1.50%, which is only slightly higher than the U.S. Federal Reserve’s federal funds rate of 1.00%. The 1.50% for the overnight rate is the lowest since 1958.

December 16, 2008

Construction prices run low on oil

After hitting an almost 30-year high of 12.7% year over year in August 2008, construction material price inflation — as measured by CanaData (based on Statistics Canada industrial product price indexes) — slowed to 6.2% in October 2008. This drop is due primarily to sharp declines in prices of petroleum-derived products such as diesel fuel.

December 15, 2008

Canada’s labour markets start to slide: Construction will feel the impact

On Friday, December 5th, Statistics Canada reported that national employment declined by 71,000 jobs in November versus October. The first chart below shows that the volatility in the month-to-month numbers has increased dramatically. The only other comparable decline in the past six years occurred four months ago in July (-55,000), but this was quickly followed by a great leap upward (+107,000) in September.

December 11, 2008

Jailing the bearer of bad economic news doesn’t solve Latvia’s problem

While governments in most of the major developed countries attempt to combat the current economic crisis by cutting taxes or increasing spending, Latvia has adopted a very different approach.

December 10, 2008

Canada’s city labour markets hold up well through October

Despite the worrying times, Canada’s labour markets continued to be healthy in October 2008, according to Statistics Canada.

December 9, 2008

Canadian economic growth likely to stall in fourth-quarter 2008

According to Statistics Canada, the Canadian economy grew by 1.3% at annual rates in third-quarter 2008, following a 0.6% increase in the second quarter.

December 8, 2008

Canada’s economy entering recession: Satisfactory third-quarter GDP growth

On December 1st, Statistics Canada released third-quarter 2008 Gross Domestic Product (GDP) figures for Canada.

December 4, 2008

Permanent tax cuts work, but temporary fixes don’t

According to some, our federal government’s recent Economic and Fiscal Update was disappointing because it did not contain major measures to stimulate the economy.

December 3, 2008

The spotlight turns from inflation to deflation in the U.S. and Canada

For October 2008, there was good news on the inflation front in both the United States and Canada. The year-over-year change in the all-items Consumer Price Index (CPI) in the U.S. dropped from 4.9% the month before to 3.7% and, in Canada, it fell from 3.4% to only 2.6%. Core inflation in the U.S. fell to 2.2% and held steady in Canada at 1.7%.

December 3, 2008

Federal Reserve Bank’s December Beige Book brings more bad news

On December 3, 2008, just wo days after the National Bureau of Economic Research announced that the U.S. has been in a recession for the past year, the Federal Reserve released its latest Beige Book. The report found that overall economic activity has weakened across all Federal Reserve Districts since the Fed’s last report in October 2008.

December 2, 2008

Large firms more productive, Bank of Canada study finds

Probably one of the most persistent and frustrating economic issues in Canada is the fact that our labour productivity, i.e., output per worker, is considerably lower than it is in the United States.

December 2, 2008

Why infrastructure spending may be Canada’s best shot at beating the economic crisis

CanaData chief economist Alex Carrick offers some suggestions about what Canada needs to do to limit the damage of the global economic crisis.