Economic Analysis – Canada –April 2016

By: Paul Young, CPA, CGAJuly 1, 2016

Disclaimer• This presentation is on view of the Canadian Economy for April 2016

Paul Young - Presenter

Bio• CPA/CGA• 25 years of experience in Academia, Industry and Financial solutions• Youtube Channel -

https://www.youtube.com/channel/UCAArky1bAXPSuV2NLtUnyLg

Agenda• GDP Growth• GDP by Sector• Wages / Growth• Employment• Housing Starts• Trade• Retail Sales• Policies

GDP Growth

GDP / April 2016 - Canada• The biggest concern here is that, by sector, the largest declines were in mining, quarrying, and oil and gas extraction, which fell by 1.4% m/m on a -7.3% m/m decline in unconventional oil extraction due to a maintenance shutdown at an upgrader. Statistics Canada warned that “These declines preceded the wildfires in the Fort McMurray and Wood Buffalo region of northern Alberta that occurred in May, a significant event for the non-conventional oil extraction industry.”

• Other sectors were decently strong. Utilities (+1.9% m/m), manufacturing (+0.4% m/m), wholesale trade (+0.2% m/m), retail trade (+0.2% m/m), transportation (+0.4% m/m), real estate (+0.5% m/m) — they were all strong. But the oil sector seems to be casting somewhat of a long shadow over the Canadian economy in Q2.

Source: Scotiabank

Wages / Growth - CanadaThe change in weekly earnings reflects a number of factors, including wage growth, changes in the composition of employment by industry, occupation, and level of job experience, as well as average hours worked per week.

Non-farm payroll employees worked an average of 32.9 hours per week in April, unchanged from the previous month, and down from an average of 33.1 hours in April 2015Source: Stats Canada

Employment

Housing Starts

Trade • Canada’s exports increased 1.5% to $41.8 billion in April. Export prices were up 1.1% and volumes

rose 0.5%. Imports increased 0.9% to $44.7 billion, as volumes were up 0.8% and prices edged up 0.1%. As a result, Canada’s merchandise trade deficit with the world narrowed from $3.2 billion in March to $2.9 billion in April.

• Trade deficit with non-US countries narrows• Imports from countries other than the United States fell 3.0% to $15.0 billion. In April, there were

lower imports from Germany (-$174 million) and South Korea (-$170 million). Exports to countries other than the United States decreased 0.6% to $10.5 billion. Lower exports to the United Kingdom (-$276 million) and Spain (-$105 million) were mostly offset by higher exports to countries other than Canada’s principal trading partners (+$268 million) and to Mexico (+$105 million). As a result, Canada’s trade deficit with countries other than the United States narrowed from $4.9 billion in March to $4.5 billion in April.

• Imports from the United States were up 3.0% to $29.7 billion and exports increased 2.3% to $31.3 billion in April. Consequently, Canada’s trade surplus with the United States narrowed from $1.7 billion in March to $1.6 billion in April.

Retail Sales

Policies• Carbon Tax/Pricing (Alberta/Ontario)• CPP expansion