CanaData’s forecasts of the economy’s leading indicators are in the table that accompanies this report. This nation has experienced distress since the fall of last year, but neither the depth of the decline nor the duration have been anything like as severe as have been experienced in most other developed nations around the world. The worst numbers are appearing this year, with gross domestic product (GDP) set to fall by 2.5%, the unemployment rate to average 8.4% for the year, job losses to total 350,000 and corporate profits to falter by 25%. The outlook for next year is considerably brighter.

Many countries are now reporting a return to modest growth in the latest month or so.  China continues to astound with the strength of its rebound. This is the result of massive infrastructure spending and mandated looser lending practices by financial institutions. Some of the latter is now being reined in, as there is concern that there may be too much stimulus in place. China’s growth is helping to lift the entire Pacific Rim. Raw material suppliers also being caught up in the advancing tide. China is diligently searching for commodity inputs. Australia is one obvious source, but Canada qualifies as well.

The fact that U.S. homebuilding markets are stabilizing and improving removes a serious impediment to that nation’s return to expansion. Better financial markets, government stimulus money and stability in auto sector ownership will combine with record low interest rates to fuel growth. Canada will be a beneficiary of the pick-up in U.S. business. De-leveraging by lenders to shore up capital and a switch from spending to saving by consumers will serve to slow the recovery process, but it will move forward nonetheless. However, it will occur at a slower pace than in previous business cycle recoveries.

For a more in-depth analysis of the economic outlook and commentary on the prospects for the five major categories of construction activity, please click here to connect with Alex Carrick's blog article.