Private sector forecasters still overly optimistic

The latest survey of private sector forecasters, included in the recent Federal Budget, shows that they remain overly optimistic about the prospects for economic growth in 2013 and beyond. Ignoring the fragile global backdrop, discounted Canadian oil prices and the dangers of a severe housing slowdown, the forecast that GDP growth will accelerate from 1.6% this year to 2.5% in 2014 would seem to hinge on a sizeable rebound in business investment, supported by somewhat higher commodity prices. We think Canada's economy is actually at a crossroads and that, rather than growth accelerating, it will remain weak well into next year.