New Year, New Promise

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New Year, New Promise. Aron Gampel Vice-President & Deputy Chief Economist Scotiabank Economics. March 5, 2013. Canadas Growth Performance At High End Of G7 Trends. Cumulative Output Rise From 2009 Trough. Cumulative Output Rise From Prior Peak. Euro zone (ex. Germany). - PowerPoint PPT Presentation

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  • New Year, New Promise

    Aron GampelVice-President & Deputy Chief EconomistScotiabank Economics

    March 5, 2013

  • Source: DataInsight, Scotiabank Economics.Canadas Growth Performance At High End Of G7 TrendsCumulative Output Rise From 2009 Trough% changeCumulative Output Rise From Prior Peak% changeEuro zone (ex. Germany)Euro zone (ex. Germany)

    Chart1

    0.6382337342

    7.5253917014

    8.76700777

    9.2022258337

    Sheet1

    0.6

    U.S.7.5

    Germany8.8

    Canada9.2

    Chart1

    -4.6773181506

    1.3616826262

    2.4823653009

    4.4365180217

    Sheet1

    -4.7

    Germany1.4

    U.S.2.5

    Canada4.4

  • Canadas Performance Underpinned By A Diversified Economy Canadas Primary Sector Outputindex, 2004=100Oil, Gas & Coal (3%)Agriculture & Fishing (2%)Mining (1%)Forestry & Lumber (2%)Canadian Outputindex, 2004=100Manufacturing (9%)Primary (11%)TotalConstruction (6%)Services (72%)forecastforecastBracketed numbers represent share of total output.Source: Statistics Canada, Scotiabank Economics.Utilities (3%)

    Chart1

    1001001001000100

    103.416156264299.275642225499.0300607138102.116320227205100

    102.8971291312101.378231037994.498741300299.213361416406100

    104.2777258579103.397393267798.395774717491.401145302707100

    118.879998146399.463003595995.332321437482.666361611508100

    113.839565005896.69539142879.837356236768.81708129509100

    112.291751948398.042760603584.988153413376.158592798510100

    113.0046418944101.162596219385.518164766378.107020530711100

    117.6414798207102.619520164286.296070070979.847737196612100

    120.9835151282102.916368662588.475279819384.1030907613100

    121.8149623157105.484063988392.182376973290.678590808414100

    Agriculture & fishing

    Oil, gas & coal

    Mining

    Forestry & lumber

    Sheet1

    DateAgriculture & fishingOil, gas & coalMiningForestry & lumber

    04100.0100.0100.0100.0100.0

    05103.499.399.0102.1100.0

    06102.9101.494.599.2100.0

    07104.3103.498.491.4100.0

    08118.999.595.382.7100.0

    09113.896.779.868.8100.0

    10112.398.085.076.2100.0

    11113.0101.285.578.1100.0

    12117.6102.686.379.8100.0

    13121.0102.988.584.1100.0

    14121.8105.592.290.7100.0

    Chart1

    100100100100100100100

    101.8602430517101.3949692699105.1564344785103.3384952651103.0889999951100105.2912349281

    101.3914246686100.8322211549109.4698576507107.3967871417105.9287769809100103.9909173218

    100.492579805298.6821039866113.2500986748110.9416828951108.3286706246100108.9858155009

    98.594926328593.1967266535118.0004386443113.067222918109.3365004402100113.9729531638

    87.530668812282.7696643063107.1826034196113.2408266023106.181993329100111.0305678111

    91.854971331686.8849369954115.7809510176116.1580748912109.6991878129100112.5234611902

    94.356054410389.7789385993120.5852880803118.7328762841112.4825077632100117.3665981633

    95.678126821293.2846335779125.0659957947120.9366650416114.712886872100114.9187213206

    97.654139933896.304931538126.0099472315122.269401359116.2953951323100116.5632318894

    100.8112896287100.6636547663127.3760529434124.0657841671118.431107294100118.3914959725

    PRIMARY

    MANUFACTURING

    CONSTRUCTION

    SERVICES

    Total

    Utilities

    Sheet1

    DatePRIMARYMANUFACTURINGCONSTRUCTIONSERVICESTotalUtilities

    04100.0100.0100.0100.0100.0100.0100

    05101.9101.4105.2103.3103.1105.3100

    06101.4100.8109.5107.4105.9104.0100

    07100.598.7113.3110.9108.3109.0100

    0898.693.2118.0113.1109.3114.0100

    0987.582.8107.2113.2106.2111.0100

    1091.986.9115.8116.2109.7112.5100

    1194.489.8120.6118.7112.5117.4100

    1295.793.3125.1120.9114.7114.9100

    1397.796.3126.0122.3116.3116.6100

    14100.8100.7127.4124.1118.4118.4100

  • Source: Statistics Canada, Scotiabank Economics.Nominal GDP Per Capitaindex: 2004=100Nominal GDP Per Capitaindex: 2004=100OntarioB.C.AlbertaQuebecSaskatchewanP.E.I.New BrunswickNova ScotiaNewfoundland and LabradorManitobaGrowth And Income Prospects Best In Canadas Resource Regions

  • annual % changeSource: Bloomberg, U.S. BEA, Statistics Canada, Eurostat, Scotiabank Economics.Real GDP2004-07Rebuilding Momentum, But Slowly

  • U.S.CanadaHousing Starts Motor Vehicle Sales U.S.CanadaU.S. Begins To Play Catch-Up In Big-Ticket PurchasesSource: Scotiabank Economics, CMHC, U.S. Census Bureau, Wards Automotive.index: 2004=100index: 2004=100

  • Existing Home Sales Canadian Housing Activity Adjusting Lower For Longer000s of units, annualizedSource: CREA, Scotiabank Economics.10-year averageExisting Home Prices$000s, national average10-year average

  • Source: Statistics Canada, U.S. BEA, Scotiabank Economics.Real Government Spending Canadaannual % changeReal Government Spending U.S.annual % change0%From Fiscal Stimulus To Fiscal Drag

  • Source: Statistics Canada, Bloomberg, Scotiabank Economics.CommoditiesCanadian Merchandise Trade BalancesC$ billions, s.a.Merchandise Trade ex. CommoditiesMerchandise TradeFaster Imports, Slower Exports Erode Canadas Trade Performance Canadian Dollar And Oil Prices CADUSDParityCanadian Dollar (RHS)forecastWTI Oil (LHS)WTI Oil US$/bbl$100/bbl

  • Canadas Large Current Account Deficit Will Be Slow To Unwind Includes industrial M&E, motor vehicles & parts, aircraft and other transportation equipment, industrial materials, special transactions, and other items. Source: Statistics Canada, Scotiabank Economics.

  • Mortgage DelinquenciesU.S.Canada% of total loans past due by three or more monthsSource: CBA, MBA, CMHC, U.S. Census Bureau, Scotiabank Economics.Less Financial Strains In Canada, But Risks Persist budget balances % of GDPFiscal year-ends: U.S. federal Sept. 30, Canada March 31.U.S. Federal ex. Social SecurityGovernment Budget ImbalancesSource: U.S. BEA, Statistics Canada, Budget documents; Nominal GDP and federal forecasts: Scotiabank Economics.forecastAggregate ProvincialCanada Federal

  • Global Industrial Activity Reviving, But SlowlyGlobal Orders And ProductionGlobal New Orders (LHS)Global Industrial Production (RHS)6 month annualized % change

    indexRecord Aircraft BacklogSource: Bloomberg, J.P. Morgan, CPB Netherlands Bureau for Economic Policy Analysis, Scotiabank Economics.Thousands of UnitsYearsbacklog

  • Profits And Large Cash Holdings to Underpin Investment Spending Growth In Corporate Profits y/y % changeUnited StatesCanadaSource: U.S. BEA, Statistics Canada, Scotiabank Economics. and Business Fixed Investment index, quarterly, zero=recession trough

  • CanadaU.S.Non-Residential Constructionindex: 2004Q1=100%CanadaU.S.Office Vacancy RatesSource: Statistics Canada, U.S. BEA, Cushman & Wakefield, CBRE, Scotiabank Economics.VancouverCalgaryNon-Residential Construction Much Stronger In CanadaToronto

  • , Source: Bank of Canada, U.S. Federal Reserve, European Central Bank, Scotiabank Economics.Central Bank RatesU.S.%CanadaEuro zone Yield Curve Flatter Now, Steeper LaterU.S.yieldCanadaGermany Source: Bloomberg, Scotiabank Economics.10-year Bond Yields

  • Source: Bank of Canada, U.S. Federal Reserve, European Central Bank, Scotiabank Economics.Central Bank RatesU.S.%CanadaEuro zone Less Inflation Risk Now, More LaterU.S.Average annual % changeCanadaEuro zone Source: Statistics Canada, U.S. BLS, Bloomberg, Scotiabank Economics.Consumer Price Inflation

  • * index 2005Q3=100, Q3/Q3, NSA. Source: Statistics Canada, U.S. BLS, Eurostats, Bloomberg, Scotiabank Economics.Employmentindex, 2004 Q1=100Unemployment Rate%U.S.CanadaGermanyEuro zone (ex. Germany)*U.K.Canada Solid Fundamentals, Better Long-Term Growth Prospects

    (ex. Germany)

    Chart1

    10010038047100100100

    100.1230769231100.013153646538139100.5200974498100.5459810437100

    100.1282051282100.197304698238231100.790885029100.7954994834100

    100.1008547009100.704317983438322101.1218944181101.2348356316100

    99.8299145299100.95782462638412101.2463387877101.5731397737100

    99.7871794872101.017613928538504101.5996681483102.1288158079100

    99.9811965812101.3512382365100102.1559829105102.6964830146100

    100.1623931624101.189807119738687102.5274209273103.0518809557100

    99.8461538462101.628660638777102.7266161449103.660369175100

    100.3213675214101.817594795938869103.6408927146104.0535265528100

    100.7256410256102.0746887967102.0941641138103.9375798834104.3923409575100

    101.0786324786102.03522785739052104.3825053536104.6645660854100

    101.7068376068102.014899494239142105.3298407491105.0755826562100

    102.058974359102.44059932839234105.8025609009105.3439808141100

    102.3316239316102.6701902496104.1585212552106.3980408961105.4013853631100

    102.7103.095890083339417107.036686874105.5807426873100

    103.2042735043103.417556530839508107.6290083826105.6037045069100

    103.3444444444103.484520549639600107.9157989602105.239121838100

    103.588034188102.9296758224104.7263490646108.0499293552104.685231723100

    103.7008547009102.726392193939783108.0330840937103.4455485961100

    103.741025641102.065122508339873106.4597366664101.7139722672100

    103.4897435897101.060662226339965105.9872270804100.2742661785100

    103.3726495726100.860965956101.6963058295105.983647462499.5083619293100

    103.4709401709100.851399667640148106.467948731499.1389317651100

    103.4982905983100.602676169240238106.834964867199.030245819100

    103.9863247863101.085773733440330107.598686911999.50657601100

    104.3128