Transcript PowerPoint Template - Western Washington University

Canadian Economic Forecast
Miracle Economy
No More?
May 17, 2013
Davenport Hotel, Spokane WA
Peter Hall
Vice-President and Chief Economist
Canada’s ‘Miracle’ Economy
Fiscal management
Financial market governance
Resource wealth
Domestic economy
Trade diversification
Canadian and US housing: disconnect
(Housing starts SAAR, ‘000 units)
3500
3000
2500
2000
1500
US
Can*
1000
500
0
98
3
99
00
01
02
Sources: US Census Bureau, Haver Analytics
03
04
05
06
07
08
09
10
11
12
13
Consumers: spending less?
(retail sales activity, 4-month MA growth)
1.5
1.0
0.5
0.0
-0.5
-1.0
-1.5
-2.0
-2.5
08
4
Source: Statistics Canada
09
10
11
12
13
Housing: a correction?
(Housing starts and permits, ‘000 units)
300
250
200
150
Starts
Permits
Formation
100
50
0
08
5
Source: Statistics Canada
09
10
11
12
13
Job creation faltering too?
(Monthly change, ‘000, 4 month MA)
80
60
40
20
0
-20
-40
-60
-80
-100
2002
6
2003
2004
Sources: CMHC, Haver Analytics
2005
2006
2007
2008
2009
2010
2011
2012
2013
Exports: also flattening?
(Merchandise exports, $millions, monthly rates)
50000
45000
40000
35000
30000
25000
08
7
Source: Statistics Canada
09
10
11
12
13
Canadian housing: a perspective
(Housing starts SAAR, ‘000 units)
350
300
250
200
150
100
50
0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
8
Sources: CMHC, Haver Analytics
Monetary stimulus
(Overnight rate target, 90-day T-bills)
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
08
9
Source: Statistics Canada
09
10
11
12
13
Public stimulus, austerity
(Gov’t spending, investment as a share of GDP, %)
27.0
26.0
25.0
24.0
23.0
22.0
21.0
20.0
00
10
01
Source: Statistics Canada
02
03
04
05
06
07
08
09
10
11
12
Canadian consumer debt: piling up
(consumer debt as a share of disposable income, %)
150.0
140.0
130.0
120.0
110.0
100.0
90.0
98
11
99
00
Source: Statistics Canada
01
02
03
04
05
06
07
08
09
10
11
12
Shift to Investment
NR Can assessment
600 resource-sector projects…
…estimated cost: $650 billion
Large draw on labour force
All regions participate
True North: next frontier
Drivers of the Canadian Dollar
Oil & gas prices
Non-energy commodity prices
Interest rate spreads
US dollar movements*
The ‘halo’ effect
Source: EDC Economics
Canadian
dollar
Excess liquidity: distortions?
Cash
injection
Cash
hoarding
Cash already
in the system
Source: EDC Economics
…and if growth really is here?
Real Economy
Source: EDC Economics
financial transmission
Canadian dollar outlook
(expressed in $US)
1.10
1.00
0.90
0.80
0.70
0.60
0.50
0.40
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18
16
US Housing: Back to balance!
(Surplus units, thousands)
10000
8000
6000
4000
2000
0
-2000
2005
17
2006
Source: EDC Economics
2007
2008
2009
2010
2011
2012
2013
US housing: gaining strength
(Housing starts SAAR, ‘000 units)
2500
2000
1500
1000
500
0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
18
Sources: US Census Bureau, Haver Analytics
Leading indicator of trade?
(Merchandise trade, total and wood products, $M)
140000
6000
120000
5000
100000
4000
80000
3000
60000
2000
40000
Total
Forestry
20000
1000
0
0
88
19
90
92
94
Sources: Statistics Canada, EDC Economics
96
98
00
02
04
06
08
10
12
Canada’s trade diversification
(relative growth paths, OECD vs. non-OECD)
500
450
OECD
Non-OECD
Static share
400
350
300
250
200
150
100
50
0
2000
20
2001
2002
Sources: Statistics Canada, EDC Economics
2003
2004
2005
2006
2007
2008
2009
2010
2011
Shares get really dramatic!
(Emerging market share of total merchandise exports, %)
45
40
35
30
25
20
15
10
5
0
2000
21
Sources: Statistics Canada, EDC Economics
2008
2011
2020
2025
Export forecast by industry
Main Sectors
Export outlook (% growth)
Share
2011
2012
2013 (f)
2014 (f)
12.8
21.4
1.5
8.7
29.2
18.1
11.0
-0.2
-1.9
3.6
6.7
-7.9
12.1
4.4
10.7
7.5
0.9
-2.0
-2.0
-6.2
-6.8
8.0
6.2
0.2
15.8
-11.1
-4.4
1.9
0.6
1.7
6.9
7.9
14.8
2.4
8.9
17.7
10.3
8.3
2.4
4.1
4.9
8.9
8.6
3.4
7.9
3.3
5.7
10.7
1.4
-4.4
3.5
9.8
13.7
2.3
3.1
4.0
7.4
5.0
4.2
4.9
(2012)
Agri-Food
Energy
Forestry
Chemical and Plastics
Fertilizers
Metals, Ores & Other Industrial Products
Industrial Machinery and Equip.
Aircraft and Parts
Advanced Technology
Motor Vehicles and Parts
Consumer Goods
Special Transactions*
Total Goods Sector
Total Service Sector
Total Exports
9.3
22.7
5.2
6.8
1.6
12.1
5.6
2.1
2.7
12.3
1.4
0.6
83.7
16.3
100.0
Outlook for the economy
(GDP growth, %))
4
3
2
1
0
-1
-2
-3
-4
2004
23
2005
2006
2007
2008
Sources: Statistics Canada, Haver Analytics; based on 1988-96 trends
2009
2010
2011
2012
2013
2014
Risks to the outlook
Domestic
slowing
Productivity
Weak
investment
trend
Availability
of capital
Price
volatility
24
Growth?
Labour
market
constraints
Labour force population in trouble
(Statistics Canada M2 projection, population 15-54)
19650
19600
19550
19500
19450
19400
19350
19300
2010
25
2011
2012
2013
Sources: Statistics Canada, Haver Analytics; based on 1988-96 trends
2014
2015
2016
2017
2018
2019
2020
Visit us at…
• Global Export Forecast
• Weekly Commentary
• Trade Confidence Index
• Research reports on international trade
• Current analysis of Canadian trade
Underlying growth, recovery-style
(US GDP, chained $2005, %)
5
5
4
4
3
3
2
2
1
1
0
0
-1
-1
-2
-2
-3
-3
-4
-4
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013f 2014f
27
Source: BEA, Haver Analytics
“Unprecedented-s”
Cycle
length
Depth of
trough
Economic
Zones
Globalisation
Policy
stimulus
A new
world
??
Sophistication
28
Communication
Rise of
EMs
Market
Share (2012)
2011
2012
2013 (f)
2014 (f)
US
18.9
1.8
2.3
2.3
3.3
Canada
1.7
2.6
2.0
2.2
1.9
Mexico
2.1
3.9
3.8
3.8
3.8
Euro Area
13.7
1.4
-0.4
0.2
1.2
Japan
5.6
-0.6
2.0
1.4
0.9
Emerging Asia
25.9
8.0
6.6
7.2
7.5
China
15.0
9.3
7.8
8.2
8.5
India
5.7
7.9
4.5
6.3
6.6
8.7
4.5
3.0
3.7
4.0
2.9
2.7
1.0
3.4
4.0
7.8
8.0
3.8
2.8
3.5
3.0
4.3
3.6
2.9
3.5
Middle East &
North Africa
4.9
4.1
5.0
3.9
4.5
Industrialized
50.2
1.6
1.3
1.6
2.4
Emerging
49.8
6.3
5.2
5.5
5.9
Total World
100.0
3.9
3.2
3.6
4.2
Latin America
Brazil
Emerging Europe &
Central Asia
Russia
Export forecast by province
Province
Export outlook (% growth)
Share
2011
2012
2013 (f)
2014 (f)
(2012)
Newfoundland & Labrador
2.6
31.6
-7.0
11.4
6.1
Prince Edward Island
0.2
5.8
14.9
6.2
4.7
Nova Scotia
0.9
2.7
-14.2
11.9
10.6
New Brunswick
3.5
16.8
0.0
3.7
1.7
Quebec
14.5
7.7
-0.2
8.0
5.6
Ontario
38.1
6.5
4.7
8.4
3.8
Manitoba
2.6
14.1
-5.2
12.4
4.3
Saskatchewan
7.4
25.1
6.4
8.1
0.5
Alberta
22.3
18.4
2.4
8.5
5.9
British Columbia
7.4
14.1
-3.0
11.1
11.7
Territories
0.5
3.2
-8.4
9.8
12.2
Canada
100
12.1
1.9
8.6
5.0
1
2
3
4
31
The Integrative Trade Model – A production and
distribution innovation that improves competitiveness
Canadian Companies
The Integrative Trade Model
Export Sales
Imported Inputs
Imported
Inputs
Outbound
Direct
Investment
Foreign Suppliers
Foreign Customers
Foreign-sourced Inputs
Affiliate Sales
Canadian Foreign Affiliates
Financial Intermediation
Logistics
R&D
Marketing
Trade’s ‘Forgotten Parallel Universe’
(Foreign affiliate sales indexes, 2000=100)
350
300
Total
Non-OECD
250
200
150
100
50
0
2000
33
2001
2002
Sources: Statistics Canada, EDC Economics
2003
2004
2005
2006
2007
2008
2009
2010
2011
A force to be reckoned with
(Merchandise trade vs. foreign affiliate sales, non-OECD)
160000
140000
FAS
120000
Mdse trade
100000
80000
60000
40000
20000
0
2000
34
2001
2002
Sources: Statistics Canada, EDC Economics
2003
2004
2005
2006
2007
2008
2009
2010
2011