www.conferenceboard.ca the economic outlook: a multi-speed recovery in a turbulent world burlington...
Post on 01-Apr-2015
238 Views
Preview:
TRANSCRIPT
www.conferenceboard.ca
The Economic Outlook: A Multi-speed Recovery
in a Turbulent World
Burlington Economic Development April 28, 2011
Glen HodgsonSenior Vice-President and Chief Economist
hodgson@conferenceboard.ca
www.conferenceboard.ca
Global Outlook
• The global economy has recovered, but with sharp differences among regions
• Japan’s natural disaster and aftermath has severely impacted short-term growth
• Slow recovery in W. Europe, with continuing public debt and energy price risks
• Medium speed in North America – real growth in Canada, too much artificial growth in the U.S.
• High speed growth in emerging markets
www.conferenceboard.ca
A Risky World Plenty of risks to go around:
• Global imbalances remain
• Earthquakes and aftermath in Japan, New Zealand
• Public sector debt in EU, Japan, U.S.
• Political turmoil in N. Africa, Middle East
• Higher oil and food prices
• Inflation in emerging markets
www.conferenceboard.ca
Uneven Growth in Global Economy(per cent change, real GDP)
Source: Consensus Economics.
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
Japan E.U. North America
Latin America
Asia Pacific Asia Pacific (excl Japan)
2010 2011 2012
www.conferenceboard.ca
Government Debt as a share of GDP(per cent, 2010)
Source: IMF
www.conferenceboard.ca
U.S. Outlook • U.S. growth set to expand by around 3.0 per cent
over the near term
• Better prospects in labour markets as well as rising consumer and business confidence
• But housing sector still a mess
• Extension of Bush tax cuts and lower payroll and business taxes will result in trillion dollar-plus deficits and massive public debt over the medium term.
• Oil price impact: every $10 increase in a barrel of oil chops 0.2 percentage points from U.S. GDP growth
www.conferenceboard.ca
www.conferenceboard.ca
U.S. Vehicle Sales(millions, annualized)
Source: Moody’s Economy.com
7
8
9
10
11
12
13
14
15
www.conferenceboard.ca
U.S. Commercial Bank Lending Finally Turning the Corner (commercial and industrial, $ billions)
Source: FRB
120012501300135014001450150015501600
www.conferenceboard.ca
-800-700-600-500-400-300-200-100
0100200300400500
U.S. Labour Market(Change in U.S. Employment, 000s)
Source: Bureau of Economic Analysis.
www.conferenceboard.ca
20
30
40
50
60
70
80
90
100
110
120
U.S. Consumer Confidence (1985=100)
Source: The Conference Board Inc.
www.conferenceboard.ca
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
'97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12
U.S. Real Consumer Spending(per cent change)
Sources: BEA; CBoC.
www.conferenceboard.ca
U.S. Existing Home Sales and Prices (millions SAAR; $thousands)
Source: National Assn. of Realtors.
200
210
220
230
240
250
260
270
280
3.5
4.0
4.5
5.0
5.5
6.0
6.5
7.0
7.5
8.0
Sales Average Price
www.conferenceboard.ca
US Housing Starts(millions, SAAR)
Source: Moody’s Economy.com
0.40.60.81.01.21.41.61.82.02.22.4
www.conferenceboard.ca
-1,500
-1,250
-1,000
-750
-500
-250
0
250
500
U.S. Federal Deficit (NIPA basis, $billions)
Sources: CBO; CBoC.
www.conferenceboard.ca
U.S. Debt as % of GDP(net debt)
Source: IMF
30
40
50
60
70
80
90
www.conferenceboard.ca
-3
-2
-1
0
1
2
3
4
5
'97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12
U.S. Real GDP(per cent change)
Sources: BEA; CBoC.
www.conferenceboard.ca
Canadian Outlook
• Fiscal and household restraint will hold overall GDP growth to 2.4 per cent this year.
• U.S. economy seems finally to have found its footing—a relatively solid expansion is expected this year and next.
• Inflation expectations remain muted despite high gasoline and food prices—still rate hikes are on the way.
• Economic outlook is positive enough to allow the federal government to return to fiscal balance but provinces will continue to struggle.
• Numerous external risks can still derail the near-term growth path.
www.conferenceboard.ca
0
20
40
60
80
100
120
140
0.60
0.65
0.70
0.75
0.80
0.85
0.90
0.95
1.00
1.05
00 01 02 03 04 05 06 07 08 09 10 11 12
Dollar (left) Oil Price (right)
The Loonie and the Oil PriceWTI $US, $US/$C
Sources: The Conference Board of Canada; U.S. EIA; Statistics Canada.
www.conferenceboard.ca
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
Sources: The Conference Board of Canada; BEA; Statistics Canada.
Canada
Interest Rates (90-Day T-Bill) Quarterly 1999–14
U.S.
www.conferenceboard.ca
Employment Growth Canada, 2001–12
Sources: The Conference Board of Canada; Statistics Canada.
-2.0-1.5-1.0-0.50.00.51.01.52.02.5
01 02 03 04 05 06 07 08 09 10 11 12
269,000 jobs lost 231,000 jobs gained
www.conferenceboard.ca
5.0
6.0
7.0
8.0
9.0
10.0
11.0
12.0
13.0
Sources: The Conference Board of Canada; Statistics Canada.
Unemployment Rate
Natural rate
Unemployment Rate vs. Natural Rate (percent), 1981-2015
www.conferenceboard.ca
0.0
1.0
2.0
3.0
4.0
5.0
0.0
1.0
2.0
3.0
4.0
5.0
02 03 04 05 06 07 08 09 10 11f 12f
Average Weekly Wages CPI
Growth in Industrial Composite Average Weekly Wage versus CPI (per cent change)
Sources: The Conference Board of Canada; Statistics Canada
www.conferenceboard.ca
Index of Consumer Confidence, CanadaJan 2004–Feb 2011 (2002 =100)
40
50
60
70
80
90
100
110
120
Source: The Conference Board of Canada.
www.conferenceboard.ca
Real Consumer Spending Growth Canada 2001–12
Sources: The Conference Board of Canada; Statistics Canada.
0.0
1.0
2.0
3.0
4.0
5.0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
www.conferenceboard.ca
Housing Starts vs. Demographic Requirements Canada 1997—15 (000s)
Sources: The Conference Board of Canada; Canada Mortgage and Housing Corporation.
120
140
160
180
200
220
240Household formation
www.conferenceboard.ca
Pre–Tax Corporate Profits(per cent share of net domestic income)
Sources: The Conference Board of Canada; Statistics Canada.
Historical Peak of 18.2 per cent
www.conferenceboard.ca
Real Business Investment Growth (Canada 2002–12)
Sources: The Conference Board of Canada; Statistics Canada.
www.conferenceboard.ca
Non-Residential, Capital Investment($ billions of $2002, 2003–15)
Sources: The Conference Board of Canada; Statistics Canada.
20
25
30
35
40
45
50
2003 04 05 06 07 08 09 10 11f 12f 13f 14f 15f
Non-Energy Energy
www.conferenceboard.ca
Real Government Spending on Goods and Services Canada
(per cent change, 2001–12)
Sources: The Conference Board of Canada; Statistics Canada.
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
01 02 03 04 05 06 07 08 09 10 11 12
www.conferenceboard.ca
-50
-40
-30
-20
-10
0
10
20
Federal Provinces
Federal and Regional BalancesNational Accounts Basis ($ billions)
Sources: Statistics Canada; The Conference Board of Canada.
www.conferenceboard.ca
Federal and Provincial Gov’t Debt(as a Share of GDP 2010-11)
Sources: The Conference Board of Canada; Statistics Canada; various government budgets.
www.conferenceboard.ca
Real GDP Growth Rate Canada 2002–12
Sources: The Conference Board of Canada; Statistics Canada.
-3.0
-2.0
-1.0
0.0
1.0
2.0
3.0
02 03 04 05 06 07 08 09 10 11 12
www.conferenceboard.ca
Conclusion
• A turbulent global economic environment
• Canada’s growth will moderate in 2011 as consumer and government spending eases
• The strong dollar is here to stay; Canadian firms will need to stay focused on remaining competitive
• The U.S. economy is recovering but better job gains are needed
• The path back to balanced budgets will be painful for America
www.conferenceboard.ca
Visit us at www.conferenceboard.ca
top related