Canadian Outlook Economic Forecast: Winter 2017

The Conference Board of Canada, 174 pages, January 27, 2017
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This quarterly economic forecast provides highlights of the Canadian Outlook report, which presents the short-term national outlook.

Document Highlights

  • Despite strong third-quarter growth, we estimate the economy grew by just 1.3 per cent in 2016.
  • Economic growth was held back by weak business investment and a disappointing export performance.
  • In 2017, economic growth is expected to accelerate to 1.9 per cent, as the energy sector is less of a drag on the economy, exports manage a slightly better performance, and government stimulus ramps up.
  • But this will be partly offset by slowing consumer spending and declining residential construction.
  • The central bank will keep its key rate at current levels until April 2018. A widening interest rate differential between Canada and the U.S. will put downward pressure on the loonie over the near term.

Table of Contents

Executive Summary


Chapter 1—Household Income and Employment

  • Incomes to Struggle Amid Weak Labour Markets and Sluggish Wage Growth
  • Employment by Industry
  • Wages and Other Sources of Income

Chapter 2—Household Consumption

  • Lacklustre Consumer Spending for the Foreseeable Future
  • Inflation Is Projected to Increase in 2017
  • Elevated Household Debt Levels Continue to Be a Concern
  • National Consumer Confidence Index Holds Steady, but Troubling Trends Emerge
  • Spending Patterns to Change Over Time

Chapter 3—Housing

  • Canada’s Housing Market Set to Cool
  • The Housing Party Is Clearly Winding Down
  • Local Housing Markets: The GTA and Its Neighbours Stand Alone
  • Housing Starts
  • Residential Investment to Ease in 2017

Chapter 4—Government

  • Balanced Budgets Remain out of Reach
  • Federal Fiscal Outlook
  • Provincial Fiscal Outlook
  • Public Sector Providing Needed Boost to Growth

Chapter 5—Business Investment

  • Business Investment Bleeding Staunched
  • Investment Drivers
  • Machinery and Equipment Investment
  • Investment in Engineering
  • Building Construction
  • Intellectual Property Investment

Chapter 6—International Trade

  • Hope for the Best, Prepare for the Worst
  • Trade Outlook
  • More Speed Bumps Ahead for Merchandise Exports
  • Import Growth Will Remain Sluggish in 2017
  • Non-Merchandise Trade Deficit Gradually Widens
  • Current Account Deficit to Climb to Record High

Chapter 7—Energy

  • Cautious Optimism on the Road to Higher Prices
  • Various Factors Will Keep Oil Prices in Check
  • Outlook for Canada’s Energy Sector

Chapter 8—Industry Trends

  • Growth Prospects Improve for Most Industries in 2017
  • Primary Industries Slowly Getting Back on Track
  • Modest Construction Activity
  • Manufacturing Industries Continue to Face Challenges
  • Commercial Services Hold Steady
  • Demographics Driving Non-Commercial Services
  • Public Administration

Chapter 9—Financial Markets

  • Loonie to Head Lower as U.S. Interest Rates Rise
  • Weak Demand Keeps Bank of Canada on the Sidelines
  • “Dot Plot” Drama
  • Monetary Policy in Other Major Economies

Appendix A—Forecast Tables

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