Economic News and Forecasts
Periodically, as a member service, DHI Canada prepares a review of economic activity and forecasts from sources such as Statistics Canada, the Bank of Canada and the Canadian chartered banks. This information is captured on this page.
Canadian Building Permit Activity - December 2017
February 9, 2018 - Statistics Canada released December 2017 building permit data this week. December 2017 saw a slight decrease in non-residential construction permits issued compared to November, but overall, December 2017 showed growth in permit activity over the same month in 2016. Preliminary figures in permit activity for the full years 2017 and 2016 also showed general increases. Read our report and analysis here.
Bank of Canada Raises Interest Rates
January 17, 2018 - As predicted, the Bank of Canada raised its target interest rate by a quarter point to 1.25% today. The Bank cited a positive business outlook, recent strong jobs reports, inflation at or near the 2% target, and forecast economic growth of 2.2% in 2018 as reasons for the rate hike. The announcement reports that uncertainty over the future of NAFTA has been priced into the economic growth forecast, so the Bank has not felt that any interest rate action regarding the potential unwinding of the trade pact is necessary at this time. Speculation last week that the Bank might hold the rate at 1% in the wake of wide-spread fears of an imminent unilateral US pullout from the NAFTA talks appear to have been unfounded. The Bank also said that interest rates should continue to rise over the longer term, but that it would monitor economic developments to determine what rate action might be necessary. The next scheduled rate announcement is March 7, 2018. You can read the text of the Bank's announcement here.
Interest Rates to Rise
January 9, 2018 - The Bank of Canada is widely expected to increase its interest rate at its meeting January 17. The expectation is based on strong business sentiment as captured in the Bank's Business Outlook research and the most recent employment figures, which showed unemployment at its lowest level in about 40 years and the creation of an estimated 80,000 jobs in December 2017. The US Federal Reserve Board is also expected to increase American interest rates in March, so the Canadian hike will anticipate that event. The Canadian dollar continues to hover around the 80 cent US mark as a result.
October 2017 GDP - Construction
December 22, 2017 - Statistics Canada reported GDP statistics for October 2017 today. Overall, GDP was unchanged from September 2017, although total construction activity declined by 0.1%, led by non-residential construction (down 0.3%). This is the first decline in total construction and non-residential construction in four months. Within the non-residential area, a decline in commercial activity more than offset growth in industrial and institutional construction. Economic results are in line with Bank of Canada predictions of a softening economy in the 4th quarter of 2017. See the data here.
Exports of Doors/Windows/Frames and Automatic Door Closures
December 11, 2017 - Statistics Canada reports exports of doors/windows/frames for Q3 2017 ($213 million) were slightly lower than in Q2 but well ahead of levels seen in Q1 2017 and Q4 2016 and that the vast majority of sales were to the US. Exports of automatic door closures in Q3 2017 ($406 thousand) were substantially above levels in the previous three quarters. 2017 year-to-date exports of doors/windows/frames ($704 million) indicate that the final 2017 export volume will, we believe, likely equal 2016's $748 million. Year-to-date levels are well above the final year totals for the period 2014-2015. Automatic Door closure exports for 2017 to date ($1.1 million) are about one third of 2016 levels but slightly above levels for 2014-2015. See the data here.
DHI-C Quick Economic Briefing - August GDP, NAFTA
November 1, 2017 - DHI Canada is pleased to present its Quick Briefing on Canadian Gross Domestic Product (GDP), our own economic forecast and the possible future of the North American Free Trade Agreement (NAFTA). The briefing is available here.
Bank of Canada News
October 25, 2017 - The Bank of Canada today decided to keep its target overnight lending rate at 1%. Some forecasters were predicting a rate increase this month, but the Bank decided that, given strong Canadian economic activity, inflation below the target rate of 2% and the somewhat uncertain international economic situation (especially as regards NAFTA renegotiations), there was insufficient justification to raise the rate. An increase in December is still a possibility. You can read the announcement here.
In its October Monetary Policy Report (MPR), the Bank is projecting Canadian GDP growth of 3.1% in 2017, 2.1% in 2018 and 1.5% in 2019. Growth, which has been strong in the first half of 2017, is expected to moderate somewhat in the last two quarters. Business investment, which includes investment in non-residential construction, is expected to remain robust over the three-year projection horizon. You can access the full MPR here.
Q3 2017 Non-residential Building Statistics
October 16, 2017 - Statistics Canada has released non-residential building statistics for Q3 2017. Nationally, the non-residential sector (industrial, commercial and institutional) saw growth of 3.6% compared to Q2. The big "winners" were educational buildings in the institutional sub-sector (up 18% compared with 4.6% growth for the sub-sector overall) and office buildings in the commercial sub-sector (which led the sub-sector to a 2.6% growth rate). The industrial sub-sector saw 6.0% growth, led by investment in the construction of farm buildings and, to a lesser extent, manufacturing plants. For the Statistics Canada bulletin and links to various tables, please click here.
Q2 2017 Non-residential Building Statistics
August 9, 2017 - Statistics Canada has released its report on Q2 2017 non-residential building construction. While overall construction activity was up by 0.3% in current dollars, it actually fell by 0.7% in terms of constant (2007) dollars - constant dollars net out the effects of inflation. Read the full article here.
Summer 2017 Review
August 1, 2017 - A lot has happened since our first review – recovery from the Fort McMurray fires, the end of the oil price shock, Brexit and election of a new US government, to name a few. How will these and other events impact our economic future? Click here to read the summer 2017 DHI-C economic forecast review.
Summer 2016 Review
August 4, 2016 - As a service to members, DHI Canada is pleased to present its first review of economic forecast data. How do you expect to fare in the next couple of years? Read the full article here.