Ottawa, Oct 07, 2019 (GLOBE NEWSWIRE) -- OTTAWA, October 7, 2019 (GLOBE NEWSWIRE) – Ongoing trade tensions and uncertainty in the global economy are impacting Canadian business investment and household purchasing power. Despite this, a recession is not on the horizon in Canada according to today’s release of The Canadian Outlook Executive Summary. A strong labour market in the first half of the year, and higher wages due to a tight labour market is expected to buoy consumer spending.
“The Canadian economy is set for a period of slower growth due to the weakness in the global economy” says Matthew Stewart, Director, National Forecast, Forecasting and Analysis. “This will lead the Bank of Canada to cut interest rates early next year.”
Overall, The Conference Board of Canada expects real GDP to expand by 1.6 per cent this year before posting a gain of 1.8 per cent in 2020.
Key highlights from the report:
- 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.
About the report:
The report examines the short-term economic outlook for Canada—all major components including consumer expenditures, housing, government, nonenergy business investment and trade. The outlook for the financial, labour and energy markets is also given along with costs and prices. The Canadian Outlook is updated each quarter using the Conference Board’s large econometric model of the Canadian economy. The publication can be purchased online at www.e-library.ca and, for clients subscribing to The Conference Board of Canada’s e-Data, at www.conferenceboard.ca/edata.htm.
For media inquiries, including media access to the report for editorial purposes, please contact:
Michelle Rozon | Erin R. Brophy
The Conference Board of Canada