Canada Economic Forecast
July 24, 2018Canada’s economy appears to have held up reasonably well through the first half of the year, despite the slowdown in consumer spending in the first quarter. Although growth in April was modest as cold weather hit retail trade, it beat expectations on solid manufacturing gains. Higher interest rates and new mortgage-lending rules continued to pinch consumers in the second quarter, although recent employment gains likely provided some upside for household spending. Meanwhile, housing metrics have begun to stabilize after falling off for much of the past year, leaving policymakers to breathe a cautious sigh of relief. Nevertheless, external headwinds are picking up; Canada-U.S. trade relations are at an all-time low, and the possibility of additional tariffs on automotive exports would bruise the external sector. Furthermore, recent posturing suggests that wrapping up NAFTA renegotiations before year-end is currently all but off the table. Despite this, exports and investment both seem largely unshaken so far.
Canada Economic GrowthFirm economic fundamentals are expected to support a solid outturn this year. Although household spending is seen moderating as higher interest rates squeeze indebted consumers, tight labor market dynamics should cushion wages. Oil and gas exports, as well as stronger non-residential investment, are expected to lend support. Risks to the outlook persist, however: NAFTA remains in limbo, and the housing market is still fragile. Met the why particular analysts expect growth of 2.1% in 2018, unchanged from last month’s forecast, and 1.9% in 2019.
Canada Economy Data
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|Bond Yield||2.31||1.00 %||Aug 14|
|Exchange Rate||1.31||0.15 %||Aug 15|
|Stock Market||16,149||0.23 %||Aug 15|
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Canada Economic News
July 20, 2018
Seasonally-adjusted consumer prices rose 0.1% from a month earlier in June, matching May’s increase.
July 12, 2018
House prices rose 0.9% on a monthly basis in June as the Teranet-National Bank National Composite House Price Index ticked higher, roughly in line with May’s 1.0% month-on-month increase.
July 11, 2018
On 11 July, the Bank of Canada (BoC) raised its target for the overnight rate by 25 basis points to 1.50%, as widely expected by market analysts.
July 8, 2018
Housing starts on a seasonally-adjusted annualized (SAAR) basis skyrocketed to 248,110 units in June, according to the Canada Mortgage and Housing Corporation (CMHC).
July 6, 2018
In June, the Ivey Purchasing Managers Index (PMI), prepared by the Richard Ivey School of Business, ticked up 0.6 points to land at 63.1 points.