Bank of Montreal’s chief economist says the Canadian economy offers plenty of positives despite what the Bank of Canada says.
In a report released today, Douglas Porter says, “By many metrics, Canada has long since returned to normal. In fact, we may look back on current conditions as the good old days.”
Here are 10 reasons to “appreciate” the current economic climate, according to Mr. Porter
- At 6.5 per cent, the jobless rate is at its lowest level in 6 years
- Consumers spending has improved with car and truck sales more than likely to surpass last year’s figures.
- The housing market is “unstoppable”, especially in Toronto, Vancouver and Calgary. Canadian home prices should rise by 5 per cent this year.
- Household debt is at par with record levels, but so is net worth when measured against disposable income, or $5.40 in assets for each $1 of debt.
- The federal government is dealing with the deficit head on.
- While globally, the developed world struggles with inflation, in Canada it’s on target at 2-per-cent.
- In all likelihood, Canada will experience a trade surplus in 2014.
- Financial conditions are stronger than in the past 15 years due to low interest rates, tight bond spreads, the sinking Canadian dollar, solid house prices and lending conditions.
- Business sector labour productivity is up by 3.3 per cent.
- Labour-management peace has led to the lowest days lost to labour disputes since the mid-1960s.
Despite these positives Mr. Porter does state that the economy is hardly “blemish-free.” Canada needs more full-time jobs, higher pay increases, a smaller current account deficit and a better showing from the provinces on balancing their books.
The Republican-dominated House of Representatives passed a bill today that would approve construction of the Keystone XL pipeline. Keystone XL gets Canadian oil to world markets and Republicans, emboldened by big gains in last week’s midterm elections, have chosen to make Keystone XL into the first battle of wills.
Meanwhile, Canada’s manufacturing sales climbed 2.1 per cent in September, to $53-billion, to mark the eighth increase in nine months, Statistics Canada said today. September’s gains were driven largely by the transportation equipment sector, without which factory shipments would have been up just 0.6 per cent.
Source: The Globe and Mail