” I Want To Put a Ding in the Universe” -Steve Jobs
Conference Board Believes No Recession for Canada
The Conference Board of Canada believes that the Canadian and U.S. economies will be able to survive the current world uncertainty and avoid a recession next year assuming that both the European and U.S. policy-makers implement the necessary policies. Board economist Pedro Antunes, said he is still hopeful European leaders will take action to shore up banks exposed to Greek debt and that of other Mediterranean countries, thereby preventing the problems from spreading around the world as happened in the fall of 2008 with the failure of Lehman Brothers. The outlook represents a somewhat rosier picture from what earlier this year was among the most pessimistic of Canada’s major forecasters. The Conference Board said Canada’s economy, which is slowing down to 2.1% growth this year, will pick up some steam next year and advance by 2.4%, before accelerating to 3.3% in 2013.
By that time, Canada’s unemployment may reach as low as 6.3%, the group’s economists say, a level not seen since early 2008, before the onset of the global recession. Meanwhile the economy in the United States is likely to rebound to levels similar to its northern neighbour. The board’s call for next year is about half a point stronger than expectations from some of Canada’s banks, particularly Scotiabank and the Bank of Montreal. For Canadian workers, the best news is that the Conference Board sees unemployment on a steady downward track to 6.3% by the end 2013. It currently sits at 7.3%.
“This summer’s weakness in private sector employment is expected to be temporary,” the report argues. “Despite a decline in infrastructure spending, construction employment will be bolstered by strong investment in the resource sector and in commercial and industrial buildings. Service sector employment will also do well.” The big drag for both the economy and employment comes from government restraint, said Antunes. He said governments will be taking about $12 billion out of infrastructure spending next year as the last projects of the stimulus spending introduced in 2009 to combat the recession wind down. He notes that next year’s growth is still modest by traditional standards, but given continued weakness in the U.S., it may be the best Canadians can expect.
The TSX closed at 11949, down -133 points or -1.10% over the past week. YTD the TSX is down -11.11%.
The DOW closed at 11809, up 165 points or 1.42% over the past week.YTD the DOW is up 2.00%.
The S&P closed at 1238, up 13 points or 1.06% over the past week.YTD the S&P is down -1.59%.
The Nasdaq closed at 2637, down -31 points or -1.16% over the past week.YTD the Nasdaq is down -0.60%.
Gold closed at 1640, down -41.00 points or -2.44% over the past week.YTD gold is up 15.41%.
Oil closed at 87.69, up 0.37 points or 0.42% over the past week.YTD oil is down -4.38%.
The CAD/USD closed at 0.9913, up 0.0020 points or 0.20% over the past week.YTD the CAD/USD is down -1.13%.
Sources: Bloomberg, Investment Executive, Conference Board of Canada