WJestin - 15-02-24 CBRE Market Outlook Breakfast...Feb 24, 2015 · Autos & Parts Canadian Exports...
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2015 Outlook: Warren Jestin SVP & Chief Economist - Scotiabank The Economics of Change CBRE Market Outlook Breakfast Toronto - February 24, 2015
Transcript of WJestin - 15-02-24 CBRE Market Outlook Breakfast...Feb 24, 2015 · Autos & Parts Canadian Exports...
2015 Outlook:
Warren JestinSVP & Chief Economist - Scotiabank
The Economics of Change
CBRE Market Outlook BreakfastToronto - February 24, 2015
The U.S. Gears Up
Source: Statistics Canada, BEA, Bloomberg, Scotiabank Economics.
-6
-4
-2
0
2
4
6
2007 08 09 10 11 12 13 14e 15f 16f
annual % change
Real GDP Growth
U.S.
Japan
Euro zone
Canada
Forecasts at February 3, 2015
Warren Jestin Page 1 February 24, 2015
Unemployment Rate
Source: Statistics Canada, BLS, Scotiabank Economics.
0
2
4
6
8
10
12
2007 08 09 10 11 12 13 14 15f 16f
U.S.
Canada
%
U.S. Labour Market Moves from Laggard to Leader
Forecasts at February 3, 2015
Warren Jestin Page 2 February 24, 2015
60
70
80
90
100
110
120
2007 08 09 10 11 12 13 14 15f 16f
Motor Vehicle Sales
Source: Statistics Canada, BEA, Scotiabank Economics.
Pent-Up Demand Puts U.S. Shoppers In A Buying Mood
U.S.
Canadaindex, 2007 = 100
Forecasts at February 3, 2015
Warren Jestin Page 3 February 24, 2015
Housing Starts
Source: CMHC, U.S. Commerce Department, Scotiabank Economics.
40
50
60
70
80
90
100
110
2007 08 09 10 11 12 13 14 15f 16f
U.S.
Canada
index 2007 = 100
Housing Activity Will Help Underpin U.S. Outperformance
Forecasts at February 3, 2015
Warren Jestin Page 4 February 24, 2015
-12
-10
-8
-6
-4
-2
0
2
2007 08 09 10 11 12 13 14e 15f 16f
Federal Fiscal Balance
Source: Finance Canada, U.S. Treasury, Scotiabank Economics.
Improved Federal Fiscal Balances – Big News In U.S.
Canada% of GDP
U.S. ex. Social
Security
Forecasts at February 3, 2015
Warren Jestin Page 5 February 24, 2015
Employment
Source: Bloomberg, Scotiabank Economics.
Ongoing Challenges in Euro Zone & Japan
96
97
98
99
100
101
102
103
104
105
2007 08 09 10 11 12 13 14
index, 2007Q1 = 100
Japan
Euro zone
U.K.
Forecasts at February 3, 2015
Warren Jestin Page 6 February 24, 2015
Emerging Nations Have Become Major Drivers of Global Growth . . .
Source: IMF WEO October 2014, Scotiabank Economics.
0
1
2
3
4
5
6
1990 2000 2007 2010 2014f 2019fEmerging and Developing Markets(share of total world GDP)
Advanced Economies(share of total world GDP)
64%
36%
57%
43%
50%
50%
46%
54%
43%
57%
global growth &share of real GDP
40%
60%
Forecasts at February 3, 2015
Warren Jestin Page 7 February 24, 2015
. . . But China is Gearing Down & Other EMs Have Stumbled
Source: Bloomberg, Scotiabank Economics.
-2
0
2
4
6
8
10
12
14
16
2007 08 09 10 11 12 13 14e 15f 16f
annual % change
Real GDP Growth
Brazil
China
India
Forecasts at February 3, 2015
Warren Jestin Page 8 February 24, 2015
Source: Bloomberg, Scotiabank Economics.
0
20
40
60
80
100
120
140
160
180
200
2007 08 09 10 11 12 13 14 15f 16f
index, 2007Q1 = 100
WTI OilNYMEX Natural Gas
Copper
Oil & Other Commodities Weaken as Supply/Demand Balance Shifts
Commodity Prices
Forecasts at February 3, 2015
Warren Jestin Page 9 February 24, 2015
Source: Bloomberg, Scotiabank Economics.
60
70
80
90
100
110
120
130
140
150
160
2007 08 09 10 11 12 13 14 15f 16f
exchange rate with US$ index, 2007Q1 = 100
Japanese Yen
Euro
U.S. Dollar Underpinned by Domestic Strength & International Risks
Currencies vs. U.S. Dollar
Brazilian Real
Forecasts at February 3, 2015
Warren Jestin Page 10 February 24, 2015
Source: Bloomberg, Scotiabank Economics.
0.60
0.65
0.70
0.75
0.80
0.85
0.90
0.95
1.00
1.05
1.10
2007 08 09 10 11 12 13 14 15f 16f
vs. US$
Canadian Dollar
Australian Dollar
The Loonie & Other Commodity Currencies Weaken
A Sharp Slide from Parity
Forecasts at February 3, 2015
Warren Jestin Page 11 February 24, 2015
40
50
60
70
80
90
100
110
120
130
07 08 09 10 11 12 13 14 15
Autos & Parts
Canadian Exports
Energy Products
Source: Statistics Canada, Scotiabank Economics.
Energy Has Become Canada’s Export Leader
$ bns, annualized,4-quarter moving average
Forecasts at February 3, 2015
Warren Jestin Page 12 February 24, 2015
-1
0
1
2
3
4
5
2007 08 09 10 11 12 13 14 15f 16f
Inflation
Source: Statistics Canada, BLS, Bloomberg, Scotiabank Economics.
Inflation Interrupted … Again
U.S.
Canada
y/y % change
Euro zone
Forecasts at February 3, 2015
Warren Jestin Page 13 February 24, 2015
0
1
2
3
4
5
6
2007 08 09 10 11 12 13 14 15f 16f
Source: Bank of Canada, U.S. Federal Reserve, Scotiabank Economics.
Central Bank Rates
U.S.
%
Canada
Monetary Policy Is On Hold For Now
Euro zone
Forecasts at February 3, 2015
Warren Jestin Page 14 February 24, 2015
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
2007 08 09 10 11 12 13 14
Alberta Has Led National Population Growth By A Wide Margin
annual % change
Population Gains by Region
Ontario
Other Western Provinces
Alberta
Quebec + Atlantic
Source: Statistics Canada, Scotiabank Economics.
Forecasts at February 3, 2015
Warren Jestin Page 15 February 24, 2015
Resource Sector Has Driven Canadian Job & Income Gains
95
100
105
110
115
120
125
07 08 09 10 11 12 13 14 15
Private-Sector Paid Employment
Index, 2007 Q1=100, SA, four quarter moving average
BC
AB
ON
QC
NL
Source: Statistics Canada, Scotiabank Economics.
Forecasts at February 3, 2015
Warren Jestin Page 16 February 24, 2015
Alberta’s Change In Economic Fortunes
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
B.C. Alberta Sask. Manitoba Ontario Quebec AtlanticCanada
2014f2015f2016f
real GDP, annual % change
Forecasts at February 3, 2015
Source: Statistics Canada, Scotiabank Economics.
Warren Jestin Page 17 February 24, 2015
Disclaimer
TM Trademark of The Bank of Nova Scotia. Used under license, where applicable.
This report has been prepared by Scotiabank Economics as a resource for the clients of Scotiabank. Opinions, estimates and projections contained herein are our own as of the date hereof and are subject to change without notice. The information and opinions contained herein have been compiled or arrived at from sources believed reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness. Neither Scotiabank nor its affiliates accepts any liability whatsoever for any loss arising from any use of this report or its contents.
Warren Jestin Page 18 February 24, 2015
