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Canadian Outlook Economic Forecast: Spring 2017

The Conference Board of Canada, 178 pages, May 25, 2017
Report
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This quarterly economic forecast provides highlights of the Canadian Outlook report, which presents the short-term national outlook.

Document Highlights

  • The Canadian economy is expected to grow by 2.3 per cent this year—a substantial improvement over the previous two years. Growth is expected to drop below 2 per cent again in 2018.
  • Households continue to be the main driver of Canadian economic growth. However, the current pace of household spending is unlikely to continue.
  • Supported by stronger oil prices, energy companies will make small increases in their capital investment starting this year. However, outside of energy, capital investment is expected to decline for the fourth consecutive year.
  • Export growth is expected to manage only a small improvement this year. There is also a risk that increased protectionism could lead to much weaker growth in exports than projected in our outlook.

Table of Contents

EXECUTIVE SUMMARY

RÉSUMÉ

Chapter 1—Household Income and Employment

  • Growth in Household Income Will Remain Underwhelming
  • Employment
  • Wages and Other Income Sources

Chapter 2—Household Consumption

  • Consumer Spending Growth Will Slow
  • Job Gains Power Rebound in Consumer Confidence, but Optimism Unlikely to Persist
  • Composition of Spending Will Change

Chapter 3—Housing

  • Another Good Year Ahead for Canada’s Housing Market
  • Housing Markets Have Largely Defied Policy Pressure … Will Toronto Be Different?
  • Local Housing Markets: Southern Ontario Sizzles, Mixed Conditions Elsewhere
  • Housing Starts
  • Residential Investment to Flatten in 2017

Chapter 4—Government

  • Public Sector Boosting Growth but Budget Deficits Widen
  • Federal Fiscal Outlook
  • Provincial Fiscal Outlook
  • Public Spending Increases Timed Right

Chapter 5—Business Investment

  • Non-Energy Investment Rout Persists
  • Investment Drivers
  • Investment in Machinery and Equipment
  • Building Construction
  • Investment in Engineering
  • Investment in Intellectual Property

Chapter 6—International Trade

  • Slowly Picking Up Steam
  • Trade Outlook
  • Global Demand Strengthens
  • Short-Term Prospects for Merchandise Exports Improve
  • Imports Slowly Getting Back on Track
  • Non-Merchandise Trade Deficit Widens
  • Current Account Deficit Remains Deep

Chapter 7—Energy

  • Slowly Improving Prospects for Canada’s Energy Sector
  • Ever-Elusive Crude Oil Market Equilibrium Continues to Be Delayed
  • Continental Natural Gas Market Surplus to be Relieved via U.S. Exports
  • Implications for Canada’s Energy Sector Outlook

Chapter 8—Industry Trends

  • Stronger Growth Ahead for Most Industries
  • Outlook for Primary Industries Is Mixed
  • Construction Activity Strengthens but Remains Modest
  • Manufacturing Slowly Getting Back on Track
  • Commercial Services Lose Some Steam in 2017
  • Demographic Trends Driving the Outlook for Non-Commercial Services
  • Public Administration Gets a Boost

Chapter 9—Financial Markets

  • Monetary Policy Begins to Normalize
  • Bank of Canada Maintains Cautious Tone as Economic Growth Remains Uneven
  • U.S. Rate Increases Continue
  • Monetary Policy in Other Major Economies

Appendix A—Forecast Tables

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