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The accompanying table shows CanaData’s latest square footage forecasts for ICI (industrial, commercial and institutional) construction in Canada, by region, out to 2010. The 2008 commercial starts figure has been left the same versus the previous forecast, made in March, but both institutional and industrial have been trimmed somewhat. The net effect is to yield a total square footage forecast for 2008 that is revised down from 79.5, made in March, to 76.0 now. Last year’s level was 89.1.
There is a saying that when the U.S. economy sneezes, the Canadian economy catches a cold.
Lately, international oil prices have been setting record highs. There have been several other periods, most notably in 1979, when oil prices (and consequently gasoline prices) spiked, causing some serious disruptions in normal economic behavior. The following looks at some of the most significant impacts.
According to Statistics Canada, three factors particularly contributed to the decline (-0.3% quarter to quarter annualized) in Canada’s real Gross Domestic Product (GDP) in first-quarter 2008: 1) weak motor vehicle production; 2) reduced inventory accumulation versus the final two quarters of 2007; and 3) inclement weather, which had an adverse effect on residential real estate sales and some other business activities. Other highlights from the latest National Accounts are set out in this report.
First-quarter 2008 real (inflation-adjusted) Gross Domestic Product (GDP) in Canada was -0.3% (on an annualized basis) versus fourth-quarter 2007. The negative figure was quite a rare event. It was only the third time in the past sixteen years that GDP has declined, on a quarter-to-quarter annualized basis. This report goes on to examine other periods of weakness in the Canadian economy and considers the question of whether or not “stagflation” is a concern at this time.
If there is one theme that comes from the recently released Statistics Canada report entitled Retail Trade: How the Provinces Fared in 2007, it is how much the strength of the housing market influenced retail trade.
Posted in
Market Insights,
Commercial Building & Heavy Engineering,
Construction Starts,
Housing,
Alberta,
British Columbia,
Manitoba,
New Brunswick,
Newfoundland and Labrador,
Nova Scotia,
Ontario,
Prince Edward Island,
Quebec,
Saskatchewan
Through April 2008, housing starts in Canada are about even with last year. So far, there has been scant evidence of a collapse in the market similar to what has transpired in the U.S. Nevertheless, one has to remain vigilant in order to spot developing trouble. Unsold inventory levels are a case in point. The accompanying graph shows that the inventory of unsold single and semi-detached units is on a fairly steep upward-climbing path and that the inventory of unsold multiples is too high by about double.
The table that accompanies this report sets out CanaData’s latest forecasts of some of the key statistical series that are used to measure and assess the performance of Canada’s economy. Real Gross Domestic Product (GDP) growth this year (+1.5%) will be about half of what might be considered normal and desirable (+3.0%). The loonie’s rise to parity with the greenback is acting as a drag on manufactured exports. Plus there are other negative fallouts from the slowdown that is currently underway in the U.S.
In first-quarter 2008, operating profits of Canadian corporations fell by 1.1% following a slightly smaller 0.9% decline in fourth-quarter 2007. There were three key contributors to this first-quarter weakness:
The quite-thorough Industrial Product Price Index (IPPI) report from Statistics Canada monitors price movements for a vast array of materials and products used in industrial processes. It provides a good means to examine some of the detail behind what is happening with respect to construction costs these days. As of April 2008, the most recent results for the relevant sub-groupings within the IPPI are examined in this story.
Posted in
Market Insights,
Costs & Materials,
Alberta,
British Columbia,
Manitoba,
New Brunswick,
Newfoundland and Labrador,
Nova Scotia,
Ontario,
Prince Edward Island,
Quebec,
Saskatchewan
