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It is just a matter of time before the recent rapid increases in agricultural commodity prices lead to higher consumer price inflation. Even though the headline CPI inflation rate edged down to 2.3% in January, from 2.4%, we anticipate that it will be up …
18th February 2011
December's survey of manufacturers was a disappointment, to us and almost everyone. Not only was growth in shipments much weaker than most had expected, more importantly declines in new and unfilled orders point to further softness ahead. … Monthly …
16th February 2011
December's trade data confirm that net exports made a very strong contribution to GDP growth in Q4. We estimate that GDP growth accelerated to 3.5% annualised in the final three months of last year. Nevertheless, this export strength partly reflects a …
11th February 2011
Solid increases in employment over the last three months are consistent with the pick-up in economic growth in Q4. However, the unfavourable split between part-time and full-time workers added in January suggest that the recovery in average hours worked …
4th February 2011
We doubt that the economic recovery is on the secure footing required for it to maintain its recent pace. We expect GDP growth of just 1.5% in both 2011 and 2012. But at least the UK has turned a corner. … House prices likely to fall for several …
3rd February 2011
We estimate that surging agricultural commodity prices will drive consumer food inflation to around 5% later this year, from just under 2%, which would add around 0.8 percentage points to headline CPI inflation. However, this bout of food inflation will …
31st January 2011
November GDP data confirm the likely pick-up in fourth quarter economic growth to more than 2.0% from 1.3% in the third. While a stronger US economy will help Canadian industry in the near-term, we think the over-valued Canadian dollar, waning government …
Higher energy prices and some base-year effects were behind the pick-up in headline inflation in December. Disinflationary pressures from excess capacity will continue to restrain core inflation. Should the global economy slow and commodity prices drop …
25th January 2011
November's manufacturing shipments continue to reflect the slow recovery in manufacturing output and a gradual improvement in capacity utilisation. While sales volumes have gone sideways over the last few months, this is in part because of temporary …
19th January 2011
The policy statement from the Bank of Canada this morning is unequivocally dovish, no doubt a bit of a disappointment to market analysts, who had expected a more hawkish tone. Indeed, despite more positive data at home and abroad and more US policy …
18th January 2011
The Bank of Canada is widely expected to hold the key policy interest rate at 1% on Tuesday. More importantly, we expect it to hold the policy rate at 1% throughout this year. This is in contrast to the market consensus view that predicts rate increases …
14th January 2011
November trade data show that net exports jumped in Q4, due to stronger commodity-related exports and also surprisingly weaker imports. Barring a collapse in December exports, we estimate that net exports made a substantial contribution (by as much as 2 …
13th January 2011
Despite the modest acceleration in employment growth in December, Canada's economy didn't generate enough net new jobs to drive the unemployment rate any lower. The unemployment rate remained unchanged at 7.6% last month, still well above the 6% rate …
7th January 2011
The latest indicators point toward fourth quarter GDP growth of around 2% annualised; a better performance than third quarter growth of 1%, but nothing spectacular considering the significant excess capacity that still exists from the recession that ended …
23rd December 2010
Our calculations indicate that real GDP did at least expand in October, albeit by a lacklustre 0.1% m/m. That should ease fears of a double-dip recession, after the unexpected contraction in September. Nevertheless, this all adds up to a soft start to …
22nd December 2010
November inflation figures support our view that sluggish economic growth is dampening inflationary pressures. Significant excess capacity and slack in labour markets are likely to keep the underlying rate of inflation in the 1% to 2% range for quite some …
21st December 2010
Manufacturing sales increased a tad stronger than we expected, though not enough to change our view on fourth-quarter GDP growth in the range of 1.5% to 2%. Indeed, looking through the monthly volatility in manufacturing and trade data, we still see only …
15th December 2010
While a restart in crude oil pipeline activity helped lift energy exports to the US, today's news was really about the surprise jump in non-oil exports to countries further abroad. Indeed, with the volume of exports outpacing imports, the drag on economic …
10th December 2010
The Bank of Canada sat on the fence today, careful not to say too much until it has updated its economic outlook. The Bank acknowledged economic growth in the second half of this year has been weaker than previously anticipated and also expressed concern …
7th December 2010
The dramatic slowdown in economic growth is preventing any real improvement in labour market conditions. Not only is the economy struggling to generate enough jobs to have a meaningful impact on reducing the unemployment rate, it is also struggling to …
3rd December 2010
If there was still any doubt that the Bank of Canada would leave its key policy rate at 1% next Tuesday, the news this week that third-quarter GDP increased by only 1.0% annualised should have dispelled it. With growth unlikely to be much stronger in the …
2nd December 2010
Economic growth has slowed considerably and indicators are pointing to another weak performance in the fourth quarter and sluggish 2% growth next year. Given expected productivity improvements, this pace of growth is too little to reduce the unemployment …
30th November 2010
Recent export and manufacturing data provide further evidence that real GDP growth slowed further in the third quarter, possibly to as weak as 1% annualised. With little evidence pointing to much stronger global economic growth ahead, foreign demand is …
25th November 2010
While past increases in energy prices led to a stronger than expected inflation report in October, this shock is unlikely to be sustained. The knock-on effect of lower commodity prices next year, together with excess capacity in product and labour …
23rd November 2010
September's manufacturing sales provide further evidence supporting the view that growth in real GDP slowed further in the third quarter, possibly to as weak as 1% annualised, which would make Canada one of the weakest performers among the G7. With little …
16th November 2010
The Fed's new programme of asset purchases (QE2) does not change our view that Canada faces an extended period of weak economic performance. We continue to expect GDP growth to stagger along at around 2% next year. Indeed, there is a danger that QE2 in …
15th November 2010
September trade data indicate that net exports were a significant drag on thirdquarter real economic growth and leading indicators point to more of the same in the near future. Indeed, with prospects of a sustained global economic expansion fading, Canada …
10th November 2010
Having fully recovered the number of jobs lost during the recession, employment growth has now started to slow. Unfortunately, with the economic recovery losing momentum, prospects for employment growth now appear weak. Indeed, the latest business survey …
5th November 2010
The world economy is set to slow as the fading of the policy stimulus again exposes the underlying fragilities left by the recession. During this period of transition, growth in external demand for Canadian goods and services is already weakening. We …
4th November 2010
