May 2011 Canadian Economic Fundamentals
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Higher loonie suggests rates won't change
The higher the Canadian dollar climbs on broad-based weakness in the U.S. dollar, the less likely the Bank of Canada will be to resume interest rate hikes.
This assessment from Scotia Capital economists Derek Holt and Karen Cordes Woods means there is a greater risk the central bank will remain on the sidelines throughout 2011 as opposed to raising rates before their October call.
The loonie soared to US$1.055 overnight as roughly one-third of the currency`s 35Â appreciation during the past two years or so has occurred since late in the summer of 2010.
While Canada`s inflation-adjusted monthly trade deficit has fallen to record lows, the economists said it is possible that not enough time has been given for lagged effects to really grip growth and inflation with downside consequences to both.
Read the full article here.
The higher the Canadian dollar climbs on broad-based weakness in the U.S. dollar, the less likely the Bank of Canada will be to resume interest rate hikes.
This assessment from Scotia Capital economists Derek Holt and Karen Cordes Woods means there is a greater risk the central bank will remain on the sidelines throughout 2011 as opposed to raising rates before their October call.
The loonie soared to US$1.055 overnight as roughly one-third of the currency`s 35Â appreciation during the past two years or so has occurred since late in the summer of 2010.
While Canada`s inflation-adjusted monthly trade deficit has fallen to record lows, the economists said it is possible that not enough time has been given for lagged effects to really grip growth and inflation with downside consequences to both.
Read the full article here.
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Average pay rises 4% in February
The average weekly earnings for Canadians rose 4 per cent on a year-over-year basis in February helped in part by a small increase in the number of hours worked.
Statistics Canada said Thursday that the average weekly earnings of non-farm payroll employees rose to $874.83, this was up from the 2.7 per cent growth for the same period a year earlier.
The agency said some of the growth for the most recent period was on the back of a 0.9 per cent increase in the average number of hours worked per week. Between February 2009 and February 2010, average hours declined by 0.3 per cent.
Read the full article here.
The average weekly earnings for Canadians rose 4 per cent on a year-over-year basis in February helped in part by a small increase in the number of hours worked.
Statistics Canada said Thursday that the average weekly earnings of non-farm payroll employees rose to $874.83, this was up from the 2.7 per cent growth for the same period a year earlier.
The agency said some of the growth for the most recent period was on the back of a 0.9 per cent increase in the average number of hours worked per week. Between February 2009 and February 2010, average hours declined by 0.3 per cent.
Read the full article here.
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Realtors seeking mortgage broker licenses
An increasing number of real estate agents are taking out mortgage broker licenses as a way of better guiding clients and protecting property deals increasingly susceptible to financial turbulence.
`As a Realtor, I see a mortgage agent license as an asset for my clients, in helping them secure a home as well as the most appropriate mortgage,` said Idalia Batson-Grazette, a real estate agent with Right At Home realty in Toronto and now a mortgage agent with Matrix Mortgage. `I saw becoming a mortgage broker as a natural progression.`
The 35-year veteran of real estate took that step two months ago. She`s not alone with a growing number of Canadian real estate agents taking provincial licensing exams and signing up with mortgage brokerages looking for well-connected professionals, according to industry professionals.
Likely driving the trend are new mortgage rule changes meant to lower Canadian household debt but that have made it more difficult for homebuyers to win financing at the Big Five. Forecasts predict increasing demand for mortgage brokers as more and more Canadians, out of necessity, explore borrowing options available through the broker channel.
Read the full article here.
An increasing number of real estate agents are taking out mortgage broker licenses as a way of better guiding clients and protecting property deals increasingly susceptible to financial turbulence.
`As a Realtor, I see a mortgage agent license as an asset for my clients, in helping them secure a home as well as the most appropriate mortgage,` said Idalia Batson-Grazette, a real estate agent with Right At Home realty in Toronto and now a mortgage agent with Matrix Mortgage. `I saw becoming a mortgage broker as a natural progression.`
The 35-year veteran of real estate took that step two months ago. She`s not alone with a growing number of Canadian real estate agents taking provincial licensing exams and signing up with mortgage brokerages looking for well-connected professionals, according to industry professionals.
Likely driving the trend are new mortgage rule changes meant to lower Canadian household debt but that have made it more difficult for homebuyers to win financing at the Big Five. Forecasts predict increasing demand for mortgage brokers as more and more Canadians, out of necessity, explore borrowing options available through the broker channel.
Read the full article here.
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Why a Toronto home received a dozen offers in a week
What They Got: This 1930s brick residence was staged by the seller, Laura Strain, and a friend, Nicole Southam ` stylists and principals of Studio S. Design ` to showcase recent renovations. The kitchen and two bathrooms were remodelled and a main-floor powder room and custom built-ins throughout were newly created, plus the windows, roof and mechanics were replaced.
The main floor of the 2,920-square-foot residence has a living room with a wood-burning fireplace, open dining area off the kitchen and a sunken family room addition with cathedral ceilings, skylights and a gas fireplace framed by French doors to a two-tiered deck.
Four bedrooms are on the second floor, including a master suite with a walk-in closet, and a sky lit loft bedroom fills out the third level.
Read the full article here.
What They Got: This 1930s brick residence was staged by the seller, Laura Strain, and a friend, Nicole Southam ` stylists and principals of Studio S. Design ` to showcase recent renovations. The kitchen and two bathrooms were remodelled and a main-floor powder room and custom built-ins throughout were newly created, plus the windows, roof and mechanics were replaced.
The main floor of the 2,920-square-foot residence has a living room with a wood-burning fireplace, open dining area off the kitchen and a sunken family room addition with cathedral ceilings, skylights and a gas fireplace framed by French doors to a two-tiered deck.
Four bedrooms are on the second floor, including a master suite with a walk-in closet, and a sky lit loft bedroom fills out the third level.
Read the full article here.
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Canada's home resale prices rise in February, report says
Canadian home resale prices rose in February for a third consecutive month, buoyed by continued strength in Vancouver, according to a report on Wednesday.
The Teranet-National Bank Composite House Price Index, which measures price changes for repeat sales of single-family homes in six metropolitan areas, showed overall prices were up 0.1 percent in February from January.
Read the full article here.
Canadian home resale prices rose in February for a third consecutive month, buoyed by continued strength in Vancouver, according to a report on Wednesday.
The Teranet-National Bank Composite House Price Index, which measures price changes for repeat sales of single-family homes in six metropolitan areas, showed overall prices were up 0.1 percent in February from January.
Read the full article here.
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5 reasons why inflation is on the rise
OTTAWA ` Inflation is rising worldwide, consumers are feeling the pinch at the pumps and at grocery checkout counters, yet central bankers say history shows rising prices will fade away.
This time, they may be wrong, says Douglas Porter, deputy chief economist at BMO Capital Markets.
"In recent announcements, both the Bank of Canada and the Federal Reserve sounded in absolute zero rush to begin tightening policy, with both viewing the recent rise in headline inflation as transitory," Porter said in a report released Thursday.
"Yet, there is a clear danger that policy-makers risk suddenly falling behind the inflation curve."
Porter challenged the following rationales:
Read the full article here.
OTTAWA ` Inflation is rising worldwide, consumers are feeling the pinch at the pumps and at grocery checkout counters, yet central bankers say history shows rising prices will fade away.
This time, they may be wrong, says Douglas Porter, deputy chief economist at BMO Capital Markets.
"In recent announcements, both the Bank of Canada and the Federal Reserve sounded in absolute zero rush to begin tightening policy, with both viewing the recent rise in headline inflation as transitory," Porter said in a report released Thursday.
"Yet, there is a clear danger that policy-makers risk suddenly falling behind the inflation curve."
Porter challenged the following rationales:
Read the full article here.
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Syncrude to inject $5B into new projects
EDMONTON - Syncrude will spend about $5 billion over the next three years to rebuild and relocate four `mine trains` which deliver bitumen from the excavation pits to its separation facilities, and construct a new composite tailings plant.
In its quarterly report released late Thursday, Canadian Oil Sands Ltd., which holds the largest share of Syncrude, announced the plans and cost estimates.
The firm also reported that higher crude oil prices and increased production propelled its cash flow to $478 million for the first three months of 2011, more than double the $225 million the firm brought in during the same period last year. And net income climbed to $324 million, or 67 cents per share, compared with $176 million for the first quarter last year.
Read the full article here.
EDMONTON - Syncrude will spend about $5 billion over the next three years to rebuild and relocate four `mine trains` which deliver bitumen from the excavation pits to its separation facilities, and construct a new composite tailings plant.
In its quarterly report released late Thursday, Canadian Oil Sands Ltd., which holds the largest share of Syncrude, announced the plans and cost estimates.
The firm also reported that higher crude oil prices and increased production propelled its cash flow to $478 million for the first three months of 2011, more than double the $225 million the firm brought in during the same period last year. And net income climbed to $324 million, or 67 cents per share, compared with $176 million for the first quarter last year.
Read the full article here.
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Loonie falls after GDP, election uncertainty weighs
The Canadian dollar retreated against a broadly weaker U.S. currency on Friday, following data that showed Canada`s economy shrank unexpectedly and amid uncertainty over next week`s federal election.
February GDP fell 0.2 percent as the manufacturing sector gave back part of its January gains and wholesale trade fell for the first time in five months.
`To a certain extent, this was telegraphed earlier by the shipments data, so this isn`t too much of a surprise,` said David Tulk, chief Canada macro strategist at TD Securities.
`It doesn`t take much away from what`s going to be a strong first quarter for the Canadian economy, so any weakness that we see in the Canadian dollar as a result of this number should be relatively short-lived.`
Read the full article here.
The Canadian dollar retreated against a broadly weaker U.S. currency on Friday, following data that showed Canada`s economy shrank unexpectedly and amid uncertainty over next week`s federal election.
February GDP fell 0.2 percent as the manufacturing sector gave back part of its January gains and wholesale trade fell for the first time in five months.
`To a certain extent, this was telegraphed earlier by the shipments data, so this isn`t too much of a surprise,` said David Tulk, chief Canada macro strategist at TD Securities.
`It doesn`t take much away from what`s going to be a strong first quarter for the Canadian economy, so any weakness that we see in the Canadian dollar as a result of this number should be relatively short-lived.`
Read the full article here.
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5 reasons why Canada's GDP unexpectedly shrank
After growth of 0.5% in January, new data from Statistics Canada showed that Canadian gross domestic product shrank unexpectedly in February for the first time in five months.
While analysts had expected GDP to be flat for the month, data showed it took a dip of 0.2%, dragged down by manufacturing and wholesale trade. The GDP slump was also Canada`s biggest since May, 2009.
The Conservatives latched onto Friday`s data as highlighting the need for government stability in Canada.
`It shows that we need to be careful, that the economic recovery is fragile,` Flaherty told Reuters. `The number is weak for February ` we`re still on track this year for 2.9%, 3% real GDP growth but that`s modest growth.
Read the full article here.
After growth of 0.5% in January, new data from Statistics Canada showed that Canadian gross domestic product shrank unexpectedly in February for the first time in five months.
While analysts had expected GDP to be flat for the month, data showed it took a dip of 0.2%, dragged down by manufacturing and wholesale trade. The GDP slump was also Canada`s biggest since May, 2009.
The Conservatives latched onto Friday`s data as highlighting the need for government stability in Canada.
`It shows that we need to be careful, that the economic recovery is fragile,` Flaherty told Reuters. `The number is weak for February ` we`re still on track this year for 2.9%, 3% real GDP growth but that`s modest growth.
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Turf war rages over discount real estate
The federal Competition Bureau may have to intervene once again in a fight between discount brokerages and the provincial associations that govern organized real estate over what has become a jurisdictional turf war.
The discounters who offer access to the Multiple Listing Service for as little as $109, say they are being prevented from listing the homes of their clients in other provinces because of interference from real estate organizations.
`No matter what we do, they keeping throwing these wrenches at us, and the public is being caught in the middle of this war,` said Ken LeBlanc, president and CEO of Propertyguys.com, one of the largest private real estate sales companies in Canada.
Read the full article here.
The federal Competition Bureau may have to intervene once again in a fight between discount brokerages and the provincial associations that govern organized real estate over what has become a jurisdictional turf war.
The discounters who offer access to the Multiple Listing Service for as little as $109, say they are being prevented from listing the homes of their clients in other provinces because of interference from real estate organizations.
`No matter what we do, they keeping throwing these wrenches at us, and the public is being caught in the middle of this war,` said Ken LeBlanc, president and CEO of Propertyguys.com, one of the largest private real estate sales companies in Canada.
Read the full article here.
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What economists expect from a Tory majority
Monday`s election results redrew the Canadian political landscape, handing Stephen Harper`s Conservatives a majority government with the New Democrats becoming the official opposition for the first time in the country`s history. The Liberals had their worst showing since Confederation while the sovereigntist Bloc QuÃbecois was all but decimated.
Read the full article here.
Monday`s election results redrew the Canadian political landscape, handing Stephen Harper`s Conservatives a majority government with the New Democrats becoming the official opposition for the first time in the country`s history. The Liberals had their worst showing since Confederation while the sovereigntist Bloc QuÃbecois was all but decimated.
Read the full article here.
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Mr. Harper, let's focus now on cutting ugly jobless rate
Stephen Harper`s Conservatives head into the next Parliament basking in the glow of a strong mandate and a healthy economic and fiscal outlook. Indeed, Mr. Harper is doubtless the envy of many world leaders, given not only this outlook but also because of how well Canada rebounded from the recession, reclaiming ground lost to the slump in terms of output and employment.
But there`s still a blight, and Mr. Harper should make it his priority.
Statistics Canada will report on Friday that the country`s jobless rate, despite having regained the jobs killed in the downturn, remains high at about 7.6 per cent or 7.7 per cent. And only last night, Bank of Nova Scotia economists projected in a new outlook that unemployment will remain at about 7.5 per cent through next year.
Read the full article here.
Stephen Harper`s Conservatives head into the next Parliament basking in the glow of a strong mandate and a healthy economic and fiscal outlook. Indeed, Mr. Harper is doubtless the envy of many world leaders, given not only this outlook but also because of how well Canada rebounded from the recession, reclaiming ground lost to the slump in terms of output and employment.
But there`s still a blight, and Mr. Harper should make it his priority.
Statistics Canada will report on Friday that the country`s jobless rate, despite having regained the jobs killed in the downturn, remains high at about 7.6 per cent or 7.7 per cent. And only last night, Bank of Nova Scotia economists projected in a new outlook that unemployment will remain at about 7.5 per cent through next year.
Read the full article here.
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Spring homebuyers facing possible bidding wars
OTTAWA ` Spring is here, and for some that means the hunt is on for a new home. What they might find themselves involved in, however, is a bidding war.
A poll conducted for Bank of Montreal showed 16 per cent of respondents had at one point in their lives been involved in a bidding war for a home.
Respondents in the online survey, taken by Leger Marketing, were all Canadians between the ages of 25 and 45, and had intentions to purchase a home within the next two years.
Those who had been part of a bidding war, on average, said they were prepared to pay nine per cent above the listed price.
Read the full article here.
OTTAWA ` Spring is here, and for some that means the hunt is on for a new home. What they might find themselves involved in, however, is a bidding war.
A poll conducted for Bank of Montreal showed 16 per cent of respondents had at one point in their lives been involved in a bidding war for a home.
Respondents in the online survey, taken by Leger Marketing, were all Canadians between the ages of 25 and 45, and had intentions to purchase a home within the next two years.
Those who had been part of a bidding war, on average, said they were prepared to pay nine per cent above the listed price.
Read the full article here.
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Oil price ends its run
CALGARY ` Oil`s big surge has come to an end, as weak economic data and waning concern that Middle East unrest justifies a large risk premium shaved US$9.44 off prices Thursday, sending oil below US$100 a barrel in New York in the biggest fall in two years.
Canadian stocks were swept up in the carnage. Energy producers, which had benefited from Middle East woes as investors rushed into oil from secure places, fell sharply. Suncor Energy Inc. was down 5.2% to close at $39.60, Canadian Natural Resources Ltd. lost 2.6% to close at $41.24, Imperial Oil Ltd. lost almost 3% to close at $48.38. Crude oil for June delivery closed at US$99.80 in New York, the fourth day of retreat and the third biggest daily drop on record.
`A lot of the heavy oil producers took a beating because they are heavily oil leveraged,` said Toronto-based independent resource analyst Glenn MacNeill. `They were up disproportionately to the general market and they were vulnerable.`
Read the full article here.
CALGARY ` Oil`s big surge has come to an end, as weak economic data and waning concern that Middle East unrest justifies a large risk premium shaved US$9.44 off prices Thursday, sending oil below US$100 a barrel in New York in the biggest fall in two years.
Canadian stocks were swept up in the carnage. Energy producers, which had benefited from Middle East woes as investors rushed into oil from secure places, fell sharply. Suncor Energy Inc. was down 5.2% to close at $39.60, Canadian Natural Resources Ltd. lost 2.6% to close at $41.24, Imperial Oil Ltd. lost almost 3% to close at $48.38. Crude oil for June delivery closed at US$99.80 in New York, the fourth day of retreat and the third biggest daily drop on record.
`A lot of the heavy oil producers took a beating because they are heavily oil leveraged,` said Toronto-based independent resource analyst Glenn MacNeill. `They were up disproportionately to the general market and they were vulnerable.`
Read the full article here.
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Loonie sapping Canada's strength: Carney
WASHINGTON ` Bank of Canada Governor Mark Carney said Friday that a robust Canadian dollar has sapped a lot of the country`s manufacturing competitiveness by raising costs of its exports in foreign markets.
`Certainly our competitiveness in manufacturing has gone down a tremendous amount, not just versus the United States where there has been a sharp rebound ` but also vis-a-vis third countries as well,` Mr. Carney said on CNBC television during an interview from Helsinki, Finland.
Mr. Carney said that the Canadian dollar`s strength posed `a downside risk to growth and inflation in Canada` and said the country was already being hit by supply-chain disruptions caused by the March 11 Japan earthquake.
Read the full article here.
WASHINGTON ` Bank of Canada Governor Mark Carney said Friday that a robust Canadian dollar has sapped a lot of the country`s manufacturing competitiveness by raising costs of its exports in foreign markets.
`Certainly our competitiveness in manufacturing has gone down a tremendous amount, not just versus the United States where there has been a sharp rebound ` but also vis-a-vis third countries as well,` Mr. Carney said on CNBC television during an interview from Helsinki, Finland.
Mr. Carney said that the Canadian dollar`s strength posed `a downside risk to growth and inflation in Canada` and said the country was already being hit by supply-chain disruptions caused by the March 11 Japan earthquake.
Read the full article here.
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Where will China find the oil to power its economy?
With OPEC tapped out, where will China find the oil to power future economic growth?
The obvious answer is it will take a big chunk out of the 19 million barrels the U.S. economy burns every day. And China doesn`t have to build a blue water navy or engage in an arms race to take a big slice of the U.S.`s energy pie . All it has to do is stop showing up at the U.S. Treasury auction, and Washington`s massive budget deficit will do the rest.
Read the full article here.
With OPEC tapped out, where will China find the oil to power future economic growth?
The obvious answer is it will take a big chunk out of the 19 million barrels the U.S. economy burns every day. And China doesn`t have to build a blue water navy or engage in an arms race to take a big slice of the U.S.`s energy pie . All it has to do is stop showing up at the U.S. Treasury auction, and Washington`s massive budget deficit will do the rest.
Read the full article here.
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Study: Hottest economies in Canada are in Calgary, Edmonton, Regina, Saskatoon
CALGARY ` Four cities in Saskatchewan and Alberta will occupy the top four spots in the economic growth leaderboard, according to the Spring 2011 edition of The Conference Board of Canada`s Metropolitan Outlook released Thursday.
`Buoyed by the resources and energy sectors, the economies of Saskatoon, Calgary, Regina and Edmonton will post noticeably stronger growth than the other cities covered in this report,` said Mario Lefebvre, Director, Centre for Municipal Studies, for the board.
The report said Saskatoon and Regina are benefiting from strong resource development in the province, while healthy population growth is bolstering the housing markets in both cities. The medium term outlook is also bright, with both economies expected to grow at an even faster pace. Saskatoon`s economy will expand by 4.1 per cent this year, and is expected to remain among the CMA growth leaders through 2013. Regina`s real gross domestic product (GDP) is slated to rise by 3.1 per cent this year.
Read the full article here.
CALGARY ` Four cities in Saskatchewan and Alberta will occupy the top four spots in the economic growth leaderboard, according to the Spring 2011 edition of The Conference Board of Canada`s Metropolitan Outlook released Thursday.
`Buoyed by the resources and energy sectors, the economies of Saskatoon, Calgary, Regina and Edmonton will post noticeably stronger growth than the other cities covered in this report,` said Mario Lefebvre, Director, Centre for Municipal Studies, for the board.
The report said Saskatoon and Regina are benefiting from strong resource development in the province, while healthy population growth is bolstering the housing markets in both cities. The medium term outlook is also bright, with both economies expected to grow at an even faster pace. Saskatoon`s economy will expand by 4.1 per cent this year, and is expected to remain among the CMA growth leaders through 2013. Regina`s real gross domestic product (GDP) is slated to rise by 3.1 per cent this year.
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March building permits soar to 4-year high
OTTAWA (Reuters) - The value of building permits issued in Canada jumped 17.2 percent in March from February to the highest level in almost four years as intentions for multi-family dwellings more than doubled, Statistics Canada said on Thursday.
Analysts in a Reuters poll had forecast a 4.0 percent slump in the value of permits in March following the surprise 9.8 percent jump in February.
In the residential sector intentions soared 33.9 percent as municipalities approved C$1.9 billion ($2.0 billion) in permits for multi-family dwellings after two consecutive months of declines. Plans for single-family homes gained 2.5 percent in the month.
Read the full article here.
OTTAWA (Reuters) - The value of building permits issued in Canada jumped 17.2 percent in March from February to the highest level in almost four years as intentions for multi-family dwellings more than doubled, Statistics Canada said on Thursday.
Analysts in a Reuters poll had forecast a 4.0 percent slump in the value of permits in March following the surprise 9.8 percent jump in February.
In the residential sector intentions soared 33.9 percent as municipalities approved C$1.9 billion ($2.0 billion) in permits for multi-family dwellings after two consecutive months of declines. Plans for single-family homes gained 2.5 percent in the month.
Read the full article here.