January 2013 Canadian Economic Fundamentals

[Ally]

Canada 2013 growth outlook cut on exports, housing: Poll




Canada's growth outlook dimmed over the last quarter, a Reuters poll showed on Wednesday, with soft export demand, a strong currency, and a cooling housing market combining to weaken economic expectations.




Economists now expect Canada's economy to expand just 1.8 percent this year, down from the 2.0 percent rate predicted in the previous poll published Oct. 11.




The survey of 33 respondents over the past week also showed forecasts cut for the fourth quarter of 2012 to an annualized rate of 1.3 percent, down from 1.9 percent three months ago. The first quarter forecast fell to 1.8 from 2.0 percent.





Read the full article here.

 

[Ally]

Harper says global economic slowdown having 'fiscal impact' on Canada





CAMBRIDGE, ONT. ` Prime Minister Stephen Harper is lowering expectations when it comes to Canada`s economy, saying a global financial slowdown is affecting the country`s growth.







The prime minister spoke after the Bank of Canada downgraded its economic growth outlook for the country to 1.9 per cent for the year just ended and 2.0 per cent for this year.





Read the full article here.

 

[Ally]

Where did all the jobs come from?




Economists are scratching their heads over Canada`s unexpectedly strong employment growth in 2012. It puzzles them for three reasons: businesses weren`t spending, governments weren`t hiring and the economy was weak.




Despite these unfavourable conditions, Canada created 272,000 new jobs in 2012, its best showing since the recession. By year-end, the unemployment rate had fallen to a four-year low of 7.1 per cent.





Read the full article here.

 

[Ally]

Banks are raising their rates - for those who can't manage their debt




Interest rates are going up.




The Bank of Canada left its trendsetting overnight rate alone on Wednesday and made it clear borrowing costs won`t increase any time soon.




But that news presents a false picture of what`s happening with the rates some people pay when they borrow money.




Selectively and quietly, the big banks have been cranking rates higher for credit line and credit card customers with a less than sterling record in managing their debts. It`s all part of a growing trend to tie the interest rates charged on loans more closely to the client`s credit history.



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[Ally]

Long-run trends for the housing and mortgage market in Canada






Living in the moment, as work and family life require, often means that we do not have the chance to lift our heads up from immediate detail to consider the long-run, big picture. In spite of warnings of burst bubbles and meltdowns, the big picture we see for the Canadian housing and mortgage market is a healthy one: housing and mortgage markets will follow a favourable path, and, while there will be some hills and valleys along the way -- accompanied by speed bumps and potholes -- the direction of the path is one of growth.









Although real estate markets are primarily local, shaped by the demographics and landscape of a particular region, national factors, such as interest rates, bank regulations, lending policies, and CMHC insurance, also play a significant role. Given the attention that these national factors are currently receiving, and the fact that demographic trends fundamental to all regions and markets can be illustrated nationally, this brief analysis focuses on the national context for Canada`s housing market and, by extension, the mortgage market in the coming years.





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[Ally]

TD economist predicts moderate growth for Canadian economy


Canada can expect moderate growth in 2013, a prominent economist told the local Chamber of Commerce Tuesday.








After navigating the 2008 recession, Canada`s economy had been impacted negatively by changes in other global economies, said Craig Alexander, chief economist for TD Bank Financial Group.








Europe is still going through dramatic changes. The countries that find themselves in dire straits would sooner or later require financial support from stronger economies such as Germany, he said.









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[Ally]

Housing market may hold key to future fed policy





While the U.S. Federal Reserve isn`t expected to stop manipulating the yield curve anytime soon, its decision to switch its forward guidance from a calendar-based approach to an outcome-based communication strategy could make the bond market more sensitive to improvements in U.S. growth.





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[Ally]

Canadians increasingly choosing to own rather than rent their homes





According to Statistics Canada, between 1981 and 2006, Canadians increasingly chose to own, rather than rent, their homes. At the outset of this 25-year period, 62% of households owned a home; by 2006, this proportion had risen 7% to 69%.







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[Ally]

What corporate insiders are signalling about future returns for REITs




Real estate investment trusts have been a great place to park cash over the past several years, with many steadily gaining in unit price while simultaneously producing attractive income payouts.




Take the iShares S&P TSX capped REIT index ETF, for instance, one of the small handful of exchange traded funds in the sector. It has doubled over the past four years and is up 4 per cent during the last two months alone.



Read the full article here.

 

[Ally]

Crucial bit of information may be driving Canadian home prices




Canada`s housing market is a bubble about to burst in some cities, or in the midst of a soft landing. Either way, a crucial piece of information on just what`s driving the market is missing in action.




Unlike in other countries such as the United States and Australia, neither the Canadian federal government nor industry keeps track of the numbers of foreign buyers or where they come from. Anecdotal evidence about foreign buyers abounds, yet hard evidence is lacking.



Read the full article here.

 

[Ally]

Canada's mysterious job creation machine




Economists are scratching their heads over Canada`s unexpectedly strong employment growth in 2012. It puzzles them for three reasons: Businesses weren`t spending, governments weren`t hiring and the economy was weak.




Despite these unfavourable conditions, Canada created 272,000 new jobs in 2012, its best showing since the recession. By year-end, the unemployment rate had fallen to a four-year low of 7.1 per cent.




All the jobs lost in 2008-2009 meltdown have now been recouped, as Finance Minister Jim Flaherty frequently reminds Canadians.





Read the full article here.

 

[Ally]

Ottawa ready to cede new powers to Northwest Territories




The Harper government is on the brink of making the Northwest Territories a province in all but name by ceding federal control over land, resources and water.




Much of the territorial government has arrived in Ottawa. Premier Bob McLeod, his cabinet, deputy ministers and aboriginal and business leaders begin two days of talks Wednesday with Prime Minister Stephen Harper and officials.



Read the full article here.

 

[Ally]

Projection sees mining in north doubling by 2020





A report by the Conference Board of Canada predicts mining production from Canada's North will nearly double by 2020.




However, the report says a lack of transportation, energy and other infrastructure are the biggest obstacles to northern mining development.




Read the full article here.