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The latest inflation figures for both the U.S. and Canada have been released over the past two days. The all-items inflation rate in the U.S. for March 2008 was 4.0% year over year, which was almost three times as high as Canada’s level of 1.4%. The U.S. inflation rate, absent food and energy, was considerably more restrained than the overall rate (2.4% versus 4.0%). However, Canada’s core inflation rate was even lower at 1.3%.
It’s a “topsy turvy” world. The U.S. is virtually, if not yet officially, in a recession. Yet costs and prices keep going up. There are food riots around the world and even when demand falls for a product, there can be surprising side effects. The following looks at some of the key influences on shifts in demand globally.
At first glance, news that February food prices were up by 0.2% compared to the same month in 2007 appears to be an error because, despite higher oil prices and rising weekly wages, mid-winter food prices in Canada exhibited their lowest year-over-year increase since February 2000.
Despite the economic headwind caused by the significant slowdown in U.S. growth, employment in the St. Catharines-Niagara metropolitan area was up by 5.9% year over year in February 2008.
The attached table records the 10 largest construction project starts in Canada in March 2008, according to dollar volume. In the latest month, there were four projects in Alberta and three each in Ontario and British Columbia. Also included is the latest trend graph on starts. This looks at 12-month moving totals (again based on dollar volume) of the two major non-residential building categories in Canada − total ICI starts and engineering work. ICI stands for industrial, commercial and institutional.
Canada Mortgage and Housing Corporation (CMHC) announced today that March 2008 housing starts, at 255,000 units seasonally adjusted and annualized, were almost exactly the same as February’s level of 256,000 units. January’s figure was also relatively high at 228,000 units. The average in first-quarter 2008 was 246,300 units, an increase of 9.0% versus the average in the first quarter of last year. Multiple-unit starts have led the way. However, builders should take note − unsold inventory is climbing.
Slowing growth of overall gross domestic product (GDP), relative to the number of hours worked, pushed labour productivity down 0.8% in fourth-quarter 2008, following a 0.1% increase in the third quarter.
According to Manpower Canada’s most recent Employment Outlook, hiring plans in the second quarter of 2008 cooled sharply compared to second-quarter 2007.
According to recently released data by Statistics Canada, total industry in Canada operated at a capacity utilization rate of only 81.8% in fourth-quarter 2007. This was the lowest utilization rate in ten years. The major reason for the weakness was a manufacturing sector that was shackled by the weight of a too-highly-valued Canadian dollar. The highest utilization rate for total industry in Canada in this decade was 87.1% achieved in the fourth quarter of 2000, just before the dot.com-induced downturn.
Although they account for only 8% of the total stock of public assets, bridges and overpasses are critical to the nation’s overall economic health.
Posted in
Market Insights,
Commercial Building & Heavy Engineering,
Alberta,
British Columbia,
Manitoba,
New Brunswick,
Newfoundland and Labrador,
Nova Scotia,
Ontario,
Prince Edward Island,
Quebec,
Saskatchewan
