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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.
On July 1, 2008, two organizations — the Institute of Supply Management (ISM) in the United States and CLSA Asia Pacific Markets Purchasing Managers Index (PMI) in China — released their respective indicators of manufacturers’ purchasing plans.
The latest (June 2008) report on the nation’s housing market has just been released by Canada Mortgage and Housing Corporation (CMHC). June’s seasonally adjusted and annualized figure for housing starts was 217,800 units, which was down 4.3% from May’s level of 227,700 units. Average seasonally-adjusted housing starts through the first half of this year (228,300 units) stand only slightly ahead (+0.7%) of the level achieved through the first half of last year (226,800 units).
Posted in
Market Insights,
Housing,
Alberta,
British Columbia,
Manitoba,
New Brunswick,
Newfoundland and Labrador,
Nova Scotia,
Ontario,
Prince Edward Island,
Quebec,
Saskatchewan
The attached table records the 10 largest construction project starts in Canada in June 2008, according to dollar volume. In the latest month, there were six projects in Ontario and two in each of Québec and Alberta. 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.
