June 2011 Canadian Economic Fundamentals

[Ally]

Global housing recovery stalls: Scotia report




It would appear the great global housing recovery of 2011 has been put on hold.




Sales and prices in developed countries are losing momentum after signs of recovery last year, Scotia Capital said Thursday. In some cases, the gains have been wiped out as `increasing nervousness over global economic prospects alongside rising food and fuel prices and persistently high unemployment are keeping potential buyers on the sidelines.`





While cheaper housing will eventually benefit those looking to wade into the market, the bank said that it could be some time before the market in countries such as Spain, the United States and the United Kingdom recover.





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[Ally]

Canada's new home prices rise more than expected




OTTAWA ` New-home prices were up 0.3% in April, Statistics Canada said Thursday.







That was a bigger gain than the 0.1% rise economists expected, and compared with no change in prices in March.







Ontario markets were the most significant drivers of April`s gains in new-home prices. Prices were up 1.3% in Ottawa-Gatineau ` which would also include part of western Quebec ` and up 0.6% in the Toronto region.





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[Ally]

Surge in renters lowers vacancy rate





It`s increasingly difficult to find rental housing across the country, as a lack of new inventory and a surge of would-be renters pushed the national vacancy rate lower.


Canada Mortgage and Housing Corp. said Thursday that the vacancy rate for Canada`s rental stock was 2.5 per cent in April, 2011, compared to 2.9 per cent in 2010.





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[Ally]

RBC Provincial Outlook





Read the full report here.

 

[Ally]

Strong loonie weakens exports




The global appetite for Canadian goods has been much weaker than expected this year, providing more troubling signs about the strength of the economy.




Canada`s trade deficit widened to $924-million in April, the largest gap in six months and well below forecasts. But it`s not just one month of weakness. Statistics Canada revisions for February and March show originally reported surpluses were actually, in both months, deficits.





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[Ally]

Canadian market better than most





While the Real Estate Market is relatively healthy in Canada, the same cannot be said for the rest of the world.












According to the latest Real Estate trends report from Scotia Economics, many of the encouraging signs of recovery in various global markets over the past months seem to be faltering- and in some cases, even reversing direction.




"Increasing nervousness over global economic prospects alongside rising food and gas prices and persistently high unemployment are keeping potential buyers on the sidelines despite highly accommodative monetary policy," said Adrienne Warren, Senior Economist and Real Estate Specialist, Scotia Economics. "A lingering oversupply of housing and/or still tight credit conditions are reinforcing the downward pressure on sales and prices in a number of markets globally."




"A marked improvement in housing affordability, particularly in those regions suffering large valuation declines in recent years, will eventually put a firmer floor under prices and underpin a gradual turnaround for the sector," added Ms. Warren. "For the time being, however, the process of repairing bloated public and household balance sheets points to a protracted period of subpar economic growth among debt-heavy developed nations that will restrain household borrowing and spending. A generally more cautious lending environment also will hold back the pace of recovery."





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[Ally]

Canada's job gains beat forecast




OTTAWA ` The Canadian economy gained more jobs than expected in May, pushing the unemployment rate down to 7.4% from 7.6% in the previous month.







Statistics Canada said Friday that 22,300 positions were added during the month. Economists had expected 20,000 jobs would be created in May, with no change in the unemployment rate.







`Employment increased in Quebec, Alberta and Saskatchewan in May. At the same time, employment declined in Newfoundland and Labrador, while there was little change in the remaining provinces,` the federal agency said.







`Employment gains were in retail and wholesale trade as well as in information, culture and recreation, while there were declines in educational services and manufacturing.`





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[Ally]

Office-market strength points to business-led recovery: Report





OTTAWA ` Canada's office market is undergoing a "remarkable" surge that points to gains in corporate hiring and the successful transition to a business-led recovery from one driven by the consumer housing market, says a report Thursday from Scotia Economics.







Rising leasing demand has pushed the national office vacancy rate to just 6.9 per cent in the first quarter from 7.3 per cent in the prior quarter and a cyclical high of 7.5 per cent in mid 2010, says economist Adrienne Warren, the report's author.







Vacancy rates are now moving lower in most of Canada's major centres, while at the same time rental prices are either stabilizing or moving higher, Warren writes.






Read the full article here.

 

[Ally]

Drought a distant memory for resurgent farmers





What a difference from past years. The beef industry is profitable, pastures are green and hay fields are lush. In fact, what a difference there is in many aspects of agriculture these days.




It's been nearly 10 years since cowcalf producers made some decent money. While the BSE (mad cow disease) outbreak has forever changed the industry, it's no longer a serious limiting factor for exports and therefore prices. Even the strong value of the Canadian dollar has been unable to thwart profitability.




On top of that, for the second year in a row, the southern Prairies are wet and green. In recent times, drought was the big issue. Now, flooded land is the main production limiting factor.






Read the full article here.

 

[Ally]

Canada adds 22,300 jobs in May; pushes jobless rate down to 7.4%





OTTAWA ` The Canadian economy gained more jobs than expected in May, pushing the unemployment rate down to 7.4 per cent from 7.6 per cent in the previous month.







Statistics Canada said Friday that 22,300 positions were added during the month. Economists had expected 20,000 jobs would be created in May, with no change in the unemployment rate.







In British Columbia, the unemployment rate fell slightly from 7.9 per cent in April to 7.6 per cent in May.




Read the full article here.

 

[Ally]

New reports show bright future for Canadian agriculture






Ottawa, Ontario, February 28, 2011 - Three major reports released today all point to healthy prospects for the agricultural industry. The reports give a clear snapshot of the state of the sector, portraying a highly complex, integrated and globally-competitive value chain that is an expanding and vibrant part of the Canadian economy.




"We are looking at another bumper year for farm incomes in 2010 thanks to good prices, lower input costs and initiatives such as AgriRecovery that helped Prairie farmers deal with weather disasters," said Agriculture Minister Gerry Ritz. "It's encouraging to see even higher prices for grains, oilseeds and hogs."




Farm incomes in 2010 are expected to surpass the record set two years ago, with 2011 also anticipated to be a good year for Canadian farmers, according to Farm Income Forecast report released today. The 2011 Overview reports that farm incomes in 2009 were at their second highest level in two decades. The average net operating income for Canadian farms in 2010 is expected to peak to more than $50,000, a five per cent jump over 2009 and 31 per cent above the 2005-09 average.





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[Ally]

Study: Contribution of small and medium-sized businesses to gross domestic product: Canada-United States comparison




Small and medium-sized businesses, those with fewer than 500 employees, accounted for 54.2% of gross domestic product (GDP) in the non-agricultural business sector in Canada in 2005.




In the United States, they accounted for 50.7% of GDP in the non-agricultural business sector in 2004.




In both countries, small and medium-sized businesses accounted for the majority of GDP in most service industries. They also accounted for more than half of the GDP in finance; professional services; health; arts, entertainment and recreation; as well as accommodation and food, and other services.




Industries in which large businesses accounted for the majority of GDP in both countries included utilities; mining and manufacturing; information and cultural industries; as well as transportation and warehousing.





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[Ally]

The housing affordability problem





Home prices have soared. Incomes have not. Rob Carrick takes a look




Watch the video here.

 

[Ally]

Carney to weigh in on housing market




Give Bank of Canada Governor Mark Carney full points for showmanship ` his decision to use Vancouver as a backdrop for a speech on the country`s housing market is a total showstopper.




The press release from the central bank saying Mr. Carney would address a sold-out Board of Trade meeting on Wednesday elicited squeals of glee from many market watchers, especially those who spend a lot of time warning others that Vancouver`s housing market is bound to crash in a spectacular manner (any day now).





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[Ally]

Canada's economy will see 3.2% growth this year: RBC




Canada's economy will grow by 3.2 per cent this year, helped by high commodity prices and a continued recovery in the United States, according to the latest outlook from RBC Economics.




It expects gross domestic product will grow at a respectable 3.1 per cent pace in 2012.




`Strong demand for commodities and a revival in U.S. demand for autos will drive healthy gains in exports ` at an average of nine per cent per annum for the next two years,` RBC chief economist Craig Wright said in a report released Thursday.





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[Ally]

House prices for major Canadian cities




Teranet-National Bank House Price Index measures house prices in six Canadian cities, and eliminates variations based on the type of properties sold (for example, during downturns, smaller properties tend to trade more, pulling down the average price more quickly than house prices are actually decreasing). It includes only houses that have been sold more than once.





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[Ally]

What does 'updated wiring' really mean?




The subject of home inspections continues to matter to buyers and sellers.




John says that he would never listen to a home inspector recommendation by a real estate agent because they only refer inspectors who will likely approve the house.




My answer is that real estate agents will normally recommend three professionals. You should take the time to check references for any inspection company before deciding to hire them.





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[Ally]

This housing expert waited too long to buy





Looking back my biggest money mistake was waiting too long to buy a house.




I also bought Nortel stock and lost money, but missing out on long-term housing price gains was far more costly. The irony is that at the time, in my 20s, I was an economist at the federal housing agency CMHC specializing in analyzing the housing market. You would think I would have taken quick advantage of home ownership.




But in my years following graduation from the University of British Columbia, I was more interested in spending than saving and since buying a house requires a down payment, it seemed a large hurdle. Spending was easier since making the minimum payment to the credit card company was all that was required to keep the debt at bay.





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[Ally]

Why did I think being a landlord was easy money?




I dreamed of riches. Who doesn`t? But, unlike most others, I knew exactly how to achieve them.




It all started at a writer`s conference in Vancouver in the early 1990s. A scribbler I had known years earlier sauntered over to chat. I hadn`t seen his byline in some time and wondered if he had sold out and gone into corporate writing.




`Oh no,` he said airily. `I`m into real estate now. I earn more in a month than I used to in a year.` He added with a smirk. `I just write for fun now.`





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[Ally]

Canadian SMEs broaden global outlook





Mississagua, April 27, 2011 - Canada's small and medium-sized enterprises (SMEs) are more global in their outlook compared to one year ago*, believing Canada must diversify its export base and do away with trade barriers in order to ensure the country's economy can compete with emerging markets.







The most recent results of UPS Canada's quarterly barometer of SMEs shows a high level of optimism about Canada's international competitiveness and the fate of its manufacturing sector.







According to the survey, conducted by Angus Reid, SMEs overwhelmingly state that the Canadian economy must become more globally competitive, with 73 per cent of SMEs opining that Canadian businesses should disregard the current strength of the loonie and put more resources into international trade.







Read the full article here.