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CanaData’s square-footage construction forecasts, for the three major categories of non-residential buildings − commercial, institutional and industrial − have been left with only minor adjustments for 2008 and 2009, due to some individual large projects. The 2010 revisions are a little more significant, in a downward direction, with a view to the fact that the world economy needs to sort out some problems.
Posted in
Market Insights,
Construction Forecasts,
Alberta,
British Columbia,
Manitoba,
New Brunswick,
Newfoundland and Labrador,
Nova Scotia,
Ontario,
Prince Edward Island,
Quebec,
Saskatchewan
Two recent business outlook surveys, one of large firms and the other of smaller ones, present opposing views of Canada’s near-term economic growth prospects.
The U.S. consumer is being plagued by falling house prices, the high cost of gasoline and tighter credit. All of these problems, to a lesser degree, are spreading to Canada. Total job growth (+1.8%) in June 2008 in Canada remained solid on a year-over-year basis, but not spectacular. However, there are some worrying trends behind the overall number. The new jobs have been coming from part-time employment, as opposed to full-time, and it is the public sector that is hiring, more than the private sector.
The first graph accompanying this report shows that total employment growth in Canada has remained much stronger than in the United States for more than a year-and-a-half. Nevertheless, weakness in some key manufacturing sectors (forest products and automotive) is now leaching over into the services sector. As can be seen from the second graph, the year-over-year change in Canadian services employment is tracking the U.S. downward, but with a marked lag.
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. Manufacturing employment, which has held up with remarkable tenacity so far, is probably also headed for more trouble.
The current situation may look bleak, but there is actually some hope in the way that developments are unfolding. The worsening worldwide prospects for interest rates and growth are forcing a reassessment of the demand outlook for oil. This should lead to at least a temporary easing in the price. It has been high-priced oil and gasoline, added to the forced savings of the credit crunch and the U.S. housing collapse, that have stood in the way of consumers rescuing the economy.
Despite a marked slowdown in office-based employment growth in Canada in the second quarter of 2008, the national office vacancy rate fell to 5.9% from 6.0% in the first quarter.
Posted in
Market Insights,
Economy & Finance,
Alberta,
British Columbia,
Manitoba,
New Brunswick,
Newfoundland and Labrador,
Nova Scotia,
Ontario,
Quebec,
Saskatchewan
An amazing array of difficulties has become aligned against the economies of the U.S. and Canada – from falling stock market indices through high oil and gasoline prices, persistent inflation problems, housing starts in retreat and upward pressure on interest rates. Add to this list, questions about the financial future of Fannie Mae and Freddie Mac, the credit crunch and auto demand in reverse. One can only hope that the current situation corresponds to the darkest part of the night, just before the dawn.
While the effects of the U.S. housing-market meltdown and record-high oil prices are clearly causing economic pain in Central Canada, economic conditions on The Rock appear to be pretty solid (pun intended).
The world price of oil at $140-plus US per barrel is making investors more than edgy. Consumers are baffled about how to balance their budgets, with gasoline priced so high. The jobs outlook has turned into a downhill-slide in the United States since the start of this year. The U.S. housing market remains mired in a sea of woes and the auto sector is showing signs of slamming on the brakes. Three of the four major North American stock market indices are dealing with -20% positions versus their previous highs.
