Canadian Outlook Economic Forecast: Autumn 2019

The Conference Board of Canada, 138 pages, November 22, 2019
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This quarterly economic forecast presents the short-term national outlook.

Document Highlights

  • Global economic growth is slowing as trade tensions impact businesses’ investment decisions and households’ purchasing power.
  • After gaining nearly 4 per cent in the second quarter, growth in the Canadian economy is expected to moderate over the remainder of the year. Real GDP is forecast to increase by 1.6 per cent this year.
  • Canadian labour markets have performed very well over the first half of the year, but job growth will slow over the second half of the year alongside a weaker economy.
  • Tight labour markets will help sustain wage growth and consumer spending over the near term, despite the debt-service ratio reaching an all-time high in the second quarter.
  • The housing market is recovering as strong employment and population growth, coupled with lower mortgage rates, is supporting demand.
  • It has been another weak year for business investment in Canada; however, 2020 looks more promising with energy investment poised for a small rebound and as pipeline projects move forward.
  • The export sector will feel the impact of slowing global demand.

Table of Contents

Executive summary


Section 1—Household income and employment

  • The current scene: A healthy labour market losing a bit of steam
  • Early indicators suggest labour market pressures are dissipating
  • The outlook: Labour markets to face pressure from weaker labour force growth
  • Canada’s population outlook highlights the importance of immigration

Section 2—Household consumption

  • Households putting off spending
  • Strong labour markets support household spending, but debt loads threaten growth
  • The outlook for consumer spending: Steady growth ahead
  • The effect of house prices on household spending

Section 3—Housing

  • Housing markets firm
  • Inventories climb
  • Starts remain high
  • Resale price growth accelerates
  • Forecast underpinnings
  • Forecast
  • Local housing markets

Section 4—Government

  • Government spending growth set to slow down
  • Federal fiscal outlook
  • Provincial fiscal outlook
  • Government investment and consumption spending

Section 5—Business investment

  • Business investment remains far below its peak
  • Evaluating Canada’s investment performance
  • Investment drivers
  • Investment by industry
  • Investment by category

Section 6—International trade

  • Turbulent global conditions weigh on trade
  • Trade outlook
  • Slower U.S. economic growth hurts merchandise exports
  • Sluggish domestic demand weighs on merchandise imports
  • Weaker global demand erodes services deficit in 2019
  • Current account deficit narrows, but level remains

Section 7—Energy

  • Prospects for 2019 remain dim
  • Global oil markets remain balanced
  • Production cuts in Alberta continue
  • Trans Mountain Expansion to spark oil sands investment
  • Capacity constraints to ease

Section 8—Industry trends

  • Industrial real GDP growth eases in 2019
  • Muted outlook for primary resources
  • Construction activity declines in 2019
  • Slower global demand weighs on manufacturing output
  • Commercial services posts positive growth
  • Demographic developments impact non-commercial services outlook
  • Public administration output eases beyond 2019

Section 9—Financial markets

  • Central banks look to reduce risks to economic growth by easing policy
  • Economic soft patch will push Canadian interest rates lower
  • Federal Reserve cuts rates to soften impacts of trade dispute
  • Monetary policy in other countries

Appendix A—Forecast tables

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