July 2012 Canadian Economic Fundamentals

[Ally]

Canada's unemployment rate falls





The country's national data collection and analysis agency said Friday that Canada's unemployment rate edged down 0.1 percentage points from 7.3 percent in May to 7.2 percent last month, as employers added 7,300 net jobs, reported Xinhua.







However, the number of active job seekers dropped by 16,600, which cut the size of the overall labour force.







The two consecutive months of flat job growth follows a record high two-month employment gain when 140,200 jobs were added in March and April.







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[Ally]

Ontario sole bright spot in dour June jobs report



OTTAWA`Canada`s unemployment rate inched down to 7.2 per cent last month as employers added 7,300 net new jobs, with Ontario the only province showing any significant gains, Statistics Canada reported Friday.





That number of new jobs usually isn`t enough to reduce the national unemployment rate`it had been 7.3 per cent in May`but June also saw a 16,600 drop in the number of active workers which reduced the overall size of the labour force, Statistics Canada explained.





It was the second month in a row that Canada saw minimal job gains after two stunning months`March and April`when the economy added 140,000 jobs.





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[Ally]

Canada rental housing crunch 'threatens economic recovery'




Canada`s apartment market is deeply out of balance and rising rental costs are threatening the country`s economic recovery, says a new report from the Federation of Canadian Municipalities.




With owner-occupied housing experiencing a massive boom over the past decade, developers have started to ignore the rental market in favour of more profitable condo buildings, the report says.




The result is that the supply of rental housing hasn`t kept up with demand. Even though one-third of Canadians rent their homes, only 10 per cent of new builds over the past decade were for rental purposes.





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[Ally]

Booming resource sector spurs wage gains





The average hourly wage in June rose by the largest amount in three years, as labour-starved resource companies boosted salaries in an effort to attract skilled workers.




Some of the biggest wage increases came in Alberta and Saskatchewan, as companies ramped up production in response to booming commodity prices. The average hourly wage in Canada jumped 3.4 per cent in June to $23.50 an hour, according to Statistics Canada data released on Friday.






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[Ally]

Canada's vanishing tech sector





If Research in Motion Ltd. is no longer Canada`s most valuable publicly-traded high tech company, what is?




The answer may surprise you. You won`t find it in the S&P/TSX information technology index. Except for its stock market listing in Toronto and the fact that it`s registered in the Yukon, it is barely Canadian at all. But in the past few years, SXC Health Solutions Corp. ` which uprooted its head office from Milton, Ont., to the Chicago area a decade ago ` has mushroomed into a world-beater, on the back of software its sells to firms that manage prescription drug claims for employers and governments mostly in the United States.






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[Ally]

Is the global economy heading into a 'perfect storm'?





EDMONTON -Take a daytime flight to Edmonton from Southern Ontario ` as I did last week ` and you can`t help but notice how small and remote Alberta`s capital city really is.



Compared to Detroit, Chicago and the other traffic-clogged metropolises of the U.S. midwest, our unassuming burg looks like a tiny, far-off sandbar in some endless northern sea.




As the continent`s most northerly large city, Edmonton stands apart ` not only due to its remoteness, but because of its atypically sunny economic disposition.





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[Ally]

Canada's housing market at 'tipping point'



Canada's housing market is now at a "tipping point," with some cities still showing strong growth and others cooling down, Royal LePage says.





The study released today by the brokerage backs up anecdotal evidence from across the country, suggesting an inevitable slowdown for the housing boom.





It also comes amid fears of overheating in some regions, notably Toronto and Vancouver, and moves by the federal government to slow the fevered pace of borrowing among Canadians who have embraced record low interest rates.





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[Ally]

Canadian housing starts rise in June




OTTAWA ` Canada Mortgage and Housing Corp. says the pace of housing starts rose in June, driven by urban multiple starts ` condos, apartments and the like.







The federal agency estimates there were 20,327 actual starts in June across the country, up from 18,494 in June 2011.







Tweaked to remove monthly variations, that produced a seasonally adjusted annual figure of 222,700 last month, up from 217,400 in May.





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[Ally]

Canada's housing starts bounce higher in June






TORONTO ` Canadian housing starts picked up in June as multiple urban starts in Quebec and British Columbia bounced higher, but housing construction is still expected to slow as the year progresses, Canada Mortgage and Housing Corp said on Tuesday.




The seasonally adjusted annualized rate of housing starts was 222,700 units in June, compared with 217,400 units in May. The May figure was revised up from 211,400 units reported previously.





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[Ally]

New rules won't affect hot housing market: Experts




With stricter federal mortgage laws in place, local advisors don`t believe Grande Prairie`s housing market will slow down.




The new mortgage laws, which came into effect July 9, limit the amortization period to 25 years - down from 30 years, lowers the maximum amount Canadians can borrow in refinancing their mortgages to 80% of the value of their homes, and withdraws government insurance backing on lines of credit secured by homes.




The new laws were announced in January by federal Minister of Finance Jim Flaherty in an attempt to curb household debt.





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[Ally]

Housing starts up? Yes up!




The seasonally adjusted annualized rate of housing starts rose to 222,700 units in June, compared to the 217,400 units logged in May.




The climb runs counter to expectations, given the government announcement in late June that it would tighten conditions for both homebuyers and mortgage lenders to slow the market and prevent a bubble.




That collective action is still likely to cool construction, but not in the near-term, said one economist Tuesday.





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[Ally]

Canadian housing prices are not sustainable






As the U.S. begins to recover from its housing bubble, concerns have been escalating about a housing bubble in Canada.




`Canada is carving out a top, while the United States is seemingly carving out a bottom,` writes Gluskin Sheff economist David Rosenberg.




Using three charts, Rosenberg points out the stark differences in the Canadian and U.S. housing market and the existence of a possible Canadian housing bubble.





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[Ally]

New house prices rise 0.3% in May



Statistics Canada says its new housing price index rose 0.3 per cent in May, following a 0.2-per-cent increase in April.





Toronto, Oshawa and Calgary were the top contributors to the May increase, while prices slipped in Victoria and Charlottetown.





The largest April-to-May increases came in the Ontario cities of Sudbury and Thunder Bay, where they rose 1.6 per cent.





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[Ally]

Rapid growth of worldwide supply of oil might outpace consumption




EDMONTON - Goodbye, Peak Oil theory. Hello, looming global oil glut.




That`s the central message of a new Harvard University study, which argues that soaring crude production could soon overwhelm global demand, putting downward pressure on prices.




`Contrary to what most people believe, oil supply capacity is growing worldwide at such an unprecedented level that it might outpace consumption,` says the 76-page report, titled Oil: The Next Revolution.





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[Ally]

Most new jobs of high-paying , high-quality variety, says CIBC report




OTTAWA - A new look at Canada's labour market reveals the first six months of 2012 has seen a big improvement in the quality of jobs that have been created ` a surprise that was welcomed Thursday even though the trend likely won't last.




It is already known that Canada's economy churned out 155,000 new jobs in the first half of this year, more than economists had expected, the CIBC says in its latest report on employment quality.




But the bigger surprise is that most of those jobs have been of the full-time and high-paying variety.





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[Ally]

Consumers pay more, but Canadian producers see rewards from U.S. draught





OTTAWA ` Drought conditions across large swaths of the United States and parts of Europe are raising concerns about a food-price shock later this year.




But while consumers brace to pay more for everything from corn flakes to bread and beef, many Canadian farmers hope to reap rewards from historically high grain prices.




`It`s simple supply and demand,` said Myron Krahm, vice-president of the Manitoba Corn Growers Association.






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[Ally]

Canadian commercial real estate is primed for growth






Forget the residential market, maybe it`s time we started focusing on how strong Canada`s commercial real estate market has been, says Sonya Gulati, an economist with TD Bank.




`The commercial side of the market has recorded quite a comeback from the troughs posted in the early part of the recovery,` said Ms. Gulati in a report.




The economist notes $21-billion in commercial real estate assets sold last year, up from $10-billion in 2009. She says the short supply of projects coupled with demand has caused most regional markets to tighten over the past 12-18 months.





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[Ally]

Why is the response to the economic crisis not more serious?





The state of the world economy these days reminds me of the famous telegram from an Austrian general, responding to his German counterpart toward the end of World War One. The German described the situation in his sector of the Eastern front as `serious but not catastrophic`. In the Austrian sector, the reply came, `the situation is catastrophic but not serious`. In much of the world today the economic situation is verging on catastrophic, but `not serious` seems a perfect description of the political response.



Four years after the Lehman crisis, economic activity and employment in the OECD has not yet returned to its pre-crisis level. Unemployment is at postwar highs in every major European country apart from Germany and, while the U.S. jobless rate is now a little below its postwar record, it has been stuck above 8 percent for longer than at any time since the Great Depression. And in Britain, the long-term loss of output assumed by the government`s latest budget forecasts implies, according to Goldman Sachs calculations, that the six months of the post-Lehman crisis did greater permanent damage to the country`s productive capacity than the Great Depression or World War Two.





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[Ally]

Ranking reveals world's top countries for higher education




The Universitas 21 Ranking was announced May 11, 2012 at an event at Lund University in Sweden. Universitas 21, a leading global network of research universities, has developed the ranking as a benchmark for governments, education institutions and individuals. It aims to highlight the importance of creating a strong environment for higher education institutions to contribute to economic and cultural development, provide a high-quality experience for students and help institutions compete for overseas applicants.





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[Ally]

Building permits hit the highest level in five years





Statistics Canada says municipalities issued $7-billion worth of building permits in May, up 7.4 per cent from April and the highest level since May 2007.




The jump followed a 4.4 per cent decline in April.




The agency says the increase was largely due to higher construction intentions for institutional buildings in Alberta, British Columbia and Saskatchewan and for multi-family dwellings in British Columbia.






Read the full article here.