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Alex’s Economics Blog

Alex Carrick is Chief Economist for CanaData, Reed Construction Data’s Canadian economic forecasting and statistical service. CanaData’s products include a monthly forecast newsletter, cost indices, regional and custom starts reports and an annual conference. He is a frequent contributor to the Daily Commercial News and the Journal of Commerce. He has delivered presentations throughout North America on the Canadian, United States and world construction outlooks. Mr. Carrick has been with Reed Construction Data Canada since 1985. Previously, he was Secretary-Treasurer and Economist for the Canadian Institute of Steel Construction for thirteen years. A trusted and often-quoted source for the media, Mr. Carrick holds a Masters in Economics.
    Read more of Mr. Carrick's economic analysis at the Economic Outlook special section and Canadian Construction Market News. Read his light-hearted reflections on life on his personal blog.

January 23, 2012

Canada’s leading indicator series continued to charge ahead in December

Canada’s leading indicator series continued to set a torrid pace in December, according to Statistics Canada. The month-to-month change was +0.8%. That’s a relatively high number historically, although it was slightly less than November’s +0.9%. Important developments in the commodities sphere are also determining the pace at which Canada's economy will expand.

January 12, 2012

2012 holds promise but there’s no denying the uncertainty (part 2)

I’m an advocate of emerging nation commodity demand as a key determinant of how Canada’s economy will fare. On that basis, 2012 is not shaping up as favorably as I might have hoped. However, with the U.S. economy coming on stronger, I think the “broader state of affairs” will continue to be okay. It’s just that we’re about to see a further prolongation of uncertain times.

January 11, 2012

2012 holds promise but there’s no denying the uncertainty (part 1)

The following is an assessment of where the world economy presently stands, with additional observations on specific problem areas and how things might turn out differently than expected. Pertinent comments on the implications for Canadian construction markets are interspersed throughout.

January 4, 2012

How stock prices have performed depends on the timing of the data points

This is a time of year when many analysts choose to examine how well equities have performed. Year-end closing prices versus previous similar milestones are most telling. What becomes most clear is that such an assessment is all about the timing. Whether or not one is a proponent of buying company shares for their potential gains is likely to depend on the dates chosen as the reference points.

December 22, 2011

Canada stands firmly in the middle of the road as it enters 2012

I’m not sure what T. S. Eliot would have thought about the matter, but 2011 is closing out with neither a bang nor a whimper. In Canada, most of the recent data series are yielding results that are in the mid-range of historical patterns.

December 14, 2011

Trade issues climb the agenda in both Canada and the U.S.

A number of key issues affecting the trade between both Canada and the U.S. have recently been making the headlines.

December 5, 2011

Finding Fault with Canada’s Carbon Footprint is Absurd

Canadians may not be aware that they are standing on shifting sands. The economic underpinnings of this nation are dramatically changing.

November 23, 2011

Mixed-to-slightly-positive Messages on the U.S. Economy

The latest figures on U.S. existing home sales have added to the recent string of better news on the overall economy. At the same time, some some cautionary continue to be rung in Europe and on some other fronts.

November 17, 2011

The U.S. economy is picking up. If only Europe were on the mend.

The news on the U.S. economy of late has turned decidedly more “chipper.” If only the European debt crisis would go away.

November 8, 2011

Canada and U.S. may be on philosophically divergent growth paths

Canada and the U.S. are becoming two economies on distinctly different growth paths. I’m not speaking about the strength of those routes with respect to output increases. I mean the actual paths chosen to achieve growth and create employment for the citizens of both nations. A basic difference in philosophy may be emerging.

October 31, 2011

Categorize economics to the dismal sciences or the sexy humanities?

It’s a topsy-turvy world in the economy these days. A great deal of relief comes on the heels of the accord reached in Europe to deal with the sovereign debt problems of Greece and a few other nations. Currency exchanges and stock markets have expressed their approval. Some question marks remain nonetheless.

October 27, 2011

The overhanging dark cloud of uncertainty is perhaps dispersing

Enthusiasm concerning the future has, of necessity, been muted due to several flash points on the world stage – chief among them being Greece. On that subject, the overhanging dark cloud of uncertainty is perhaps dispersing. While some of the details are still sketchy, there are indications that Europe is finally taking forceful action to rectify its sovereign debt problems.

October 20, 2011

Latest data on the North American economy has been a tad cheerier

The latest data on the North American economy has been a tad cheerier. While this won’t serve to make anyone giddy with excitement, it will lessen the frowns that have become all too commonplace.

October 13, 2011

Urging patience while knowing all will be revealed in the fullness of time

The term “wait and see game” could have been coined for the current economic situation. The variables are largely known. How they will play out, however, remains to be determined.

October 13, 2011

Urging patience while knowing all will be revealed in the fullness of time

The term “wait and see game” could have been coined for the current economic situation. The variables are largely known. How they will play out, however, remains to be determined.

October 6, 2011

Transportation issues help reveal current concerns and long-term trends

Some of the most interesting and revealing economic news these days has to do with transportation in one form or another – oil pipelines, shipping ports and airlines. The issues encapsulate not only current concerns about the economy, but also long-term trends.

October 6, 2011

Transportation issues help reveal current concerns and long-term trends

Some of the most interesting and revealing economic news these days has to do with transportation in one form or another – oil pipelines, shipping ports and airlines. The issues encapsulate not only current concerns about the economy, but also long-term trends.

September 28, 2011

Pre-emptive warnings about home equity lines of credit (HELOCs)

The problems for Canada in the months ahead, on account of the world economic slowdown, may flare up most alarmingly in housing markets. Hopefully the United States won’t serve as the model of what to expect.

September 19, 2011

The yin and yang of politics and the economy

Today’s article is a continuation, or maybe more an extension, of the arguments set out in “Double-dip recession? The Economic Template is no longer working.” Maybe there's something happening beyond the mere economic.

September 19, 2011

The ying and yang of politics and the economy

Today’s article is a continuation, or maybe more an extension, of the arguments set out in “Double-dip recession? The Economic Template is no longer working.” Maybe there's something happening beyond the mere economic.

September 19, 2011

The ying and yang of politics and the economy

Today’s article is a continuation, or maybe more an extension, of the arguments set out in “Double-dip recession? The Economic Template is no longer working.” Maybe there's something happening beyond the mere economic.

September 14, 2011

Double-dip recession? The economic template is no longer working

The present economic circumstances in Canada, the United States, Europe and indeed around the world may be unique. Previously, in good times and bad, one had some idea what to expect. Economies would continue along a certain path until matters progressed in a well-defined and largely predictable way to cause an alteration in course. This time, the template isn't working.

September 9, 2011

Will Canada follow the lead of the American Jobs Act?

One doesn’t have to look far for proof the Canadian economy is languishing. In the past two months, total employment in the country has been flat. What can the public sector do to help out the economy?

September 1, 2011

Regional influences on the Canadian construction outlook

Let’s look at some of the regional influences on the Canadian construction outlook.

August 26, 2011

The roles of oil and natural gas in the economic outlook

How does the world become extricated from its current funk? As in all things economic, there are self-correcting mechanisms that come into play. Take energy for example.

August 18, 2011

The slowing world economy and concern for jobs in the U.S. and Canada

It’s come down to jobs. President Obama plans a speech in September that will outline an action plan to stimulate employment in the U.S. He knows his re-election chances depend very much on the degree to which significant progress can be made in putting Americans back to work.

July 26, 2011

Damage to the credit rating of the U.S. has made tomorrow today

It’s not the same old world. In a game of political one-upmanship, the Democrats and Republicans in both the House and the Senate are pushing agendas that risk sending the U.S. government into default on its financial obligations. The fact of the matter is that even if an agreement is cobbled together before August 2nd to raise the debt ceiling from $14.3 trillion, a great deal of “damage” has already been done. But what is the extent of that damage?

July 20, 2011

U.S. sub-sector jobs histories provide insight into economic structural change

Considerable insight into structural changes in the U.S. economy can be obtained by looking at six key sub-sectors and their employment levels over the past eleven-and-a-half years. Those jobs areas are to be found in: motor vehicle and parts manufacturing; legal services; accounting and bookkeeping services; architectural and engineering services; computer systems design services; and amusements, gambling and recreation.

July 12, 2011

In the context of a highly regarded Canadian economy, Toronto kicks up its heels

It is useful to employ the rule of thumb that Ontario’s GDP and population are approximately 40% of Canada’s. And that Toronto is 40% of Ontario. Except in some key areas. For example, Toronto almost always accounts for more than 50% of Ontario home starts. Toronto’s doing pretty well right now economically speaking. What does the future hold?

July 6, 2011

A shakier world outlook explains the easing in commodity prices

The health of Canada’s economy largely depends on two factors: 1) the strength of the U.S. economy; and 2) global demand for commodities and the resulting impact on their prices. The former determines Canadian exports to the U.S. The latter sets the pace of sales in the resource sector and spurs on mega project investment. At this time, the recovery from the world economic recession is still moving forward, but on unsteady legs. There are many reasons to believe in a shakier outlook.

June 29, 2011

May’s higher inflation rate in Canada can only be called “rude”

Canada’s inflation rate in May rose to the highest level since March 2003, according to Statistics Canada. The year-over-year change in the all-items Consumer Price Index (CPI) was +3.7%. April’s price advance had been +3.3%. The latest inflation-rate figure was even higher than during the commodity-induced price binge in mid-2008 (+3.5%).

June 22, 2011

The latest on Canada’s population change and pension holdings

Almost every day, there is fascinating information published in one form or another – often by Statistics Canada – on the changing nature of the Canadian social and economic make-up. The latest concerns population change nationally and in the provinces, plus the make-up of registered pension plans (RPPs) according to public versus private and defined benefit versus defined contribution.

June 15, 2011

U.S. inflation moved up to 3.6% in May with commodity prices as the spur

Complicating life for Ben Bernanke, Chairman of the Federal Reserve, is the latest report on U.S. inflation by the Bureau of Labor Statistics. May’s year-over-year change in the all-items Consumer Price Index (CPI) was +3.6%. That’s the fastest rate of increase in prices since October 2008’s +3.7%.

June 7, 2011

World’s Banking Sector Still Faces Major Challenges

The banking sector worldwide is still facing serious challenges. In Europe, the problems relate to sovereign debt issues, particularly in Greece. In China, it’s all about lending at the local level to finance infrastructure work. Social housing is the latest hot-button topic. In America, it’s going to be costs associated with improper foreclosure practices, new capital requirements that will see the largest banks saddled with holding more capital in reserve and Washington’s questionable resolve when it comes to straightening out public finances.

June 1, 2011

Stock markets are adjusting to a cloudier outlook for the world economy

The four major North American stock market indices all moved sideways-to-slightly-down in the latest month. That’s for end-of-May closing versus end-of-April. At this time, there are a number of factors muddying up the outlook for the world economy. These have been acting as a drag on stock market prices in the most recent period and will continue to have an effect well into the summer.

May 25, 2011

These are tricky times for Bank of Canada Governor, Mark Carney

These are tricky times for Bank of Canada (BOC) Governor Mark Carney. Conventional economic theory would advise raising interest rates. That’s also the position being taken by the Paris-based OECD. In its latest economic outlook, the OECD says the BOC should raise rates within the next quarter. However, there are plenty of reasons to be cautious about a return to interest rate increases after nine months of holding steady at 1.00%.

May 18, 2011

Canada’s leading indicator index advanced strongly in April

Canada’s leading indicator index continued to advance strongly in April, according to Statistics Canada. The month-to-month gain was +0.8%, which was an acceleration from March’s +0.6%. In addition to the leading indicator index, several other recent stories have been turning the spotlight on Canada as an economy to be reckoned with.

May 11, 2011

U.S. and Canadian foreign trade performed as expected in March

Foreign trade statistics for March have just been released by both the U.S. Census Bureau and Statistics Canada. The results are pretty much what was expected. The U.S. goods and services balance moved further into deficit. Canada’s merchandise trade balance, which looks at only goods exports minus good imports, became slightly more positive.

May 4, 2011

Many reasons to celebrate Canada’s escape from minority government

From a business and economics standpoint, there is an awful lot to like about Canada’s federal election result on Monday, May 2nd.

April 27, 2011

The latest data on debt and demography in Canada

With the overnight rate at only 1.00%, the Bank of Canada and especially Governor Mark Carney have been advising Canadians to go easy on the borrowing. There is the danger of becoming caught short once interest rates start to rise and monthly carrying charges increase dramatically. Over the last several days, more light has been shone on Canadians’ debt holdings by Statistics Canada.

April 21, 2011

The two key U.S. housing reports turned more positive in March

The two key measures of the U.S. housing market recorded some improvement in the latest month. Both new home starts and existing home sales recorded gains in March versus February.

April 14, 2011

Keeping up with world-wide economic events takes focus

The most recent best news has concerned U.S. retail sales. In March, they were +7.1% year over year on an actual basis. On a three-month moving average basis, they were +8.1%. Some of the other news lately hasn’t been quite as favorable.

April 6, 2011

Stock Exchanges are seeking perspective on the view

The mostly steady upward progression in stock prices from last August through this February came to a halt in March. North America’s four major indices – Dow Jones Industrials, S&P 500, NASDAQ and the Toronto Stock Exchange – ended March flat versus February’s month end. Taxes on corporate profits are a hot political topic on both sides of the U.S.-Canada border. And on the world stage, March was a month of uncertainty.

March 30, 2011

Engineering work will lead Canadian construction categories out to 2014

Between now and 2014, on a constant dollar basis, residential construction spending in Canada is set to grow at about a 2.0% average annual rate; non-residential building by +3.0%; and civil/heavy engineering work by +4.0% to +4.5%.

March 21, 2011

Eruptions in Japan and Libya alter the course of world events

The March 11 category 9.0 temblor with ensuing seven-metre-high tsunami in Japan and the March 19 UN imposed no-fly zone in Libya have very much altered the world’s physical and geopolitical landscapes. Let’s consider these events in reverse order, starting with Libya.

March 10, 2011

Government accounted for nearly half of Canada’s 2010 non-residential construction

Statistics Canada’s Private and Public Investment (PPI) in Canada is a treasure chest of information on the nation’s economy.

March 2, 2011

Public debate is about to become more political

Politics and the economy are inextricably intertwined. However, over the last several years, in fact dating back to the onset of the sub-prime mortgage mess in the U.S., the latter has probably been more prominent in public discourse than the former. Based on a number of key world trends, it seems we may be about to enter a period when politics comes to the forefront again.

February 25, 2011

The focus shifts to oil prices, extraction capacity and construction costs

Statistics Canada has released the results from its latest Public and Private Investment (PPI) survey. New construction put-in-place in 2011 is expected to be 3.6% higher than in 2010. The leader among the provinces in non-residential construction activity will be Alberta with a gain of 9.9% year-over-year in current dollars. Based on a sample of 28,000 public and private firms conducted between October 2010 and January 2011, the findings may already be out of date, having been overtaken by recent events.

February 18, 2011

Canada’s January inflation maintains the positive economic environment

The latest inflation report makes the Bank of Canada's decision about interest rates easier. With inflation still moderate, an upward adjustment isn’t mandatory at this time. Summer, not spring, is looking like the time for improved odds on when the next round of rate increases might be initiated.

February 9, 2011

A ballet with three principal dancers - commodities, construction and manufacturing

The further integration of Canada into the world economy is proceeding with lightning speed. The evidence of the momentous changes underway appears in the headlines every day. From a sectoral standpoint, there are three principal players with interlocking relationships and altering levels of importance in the overall economy - commodities, manufacturing and construction.

February 1, 2011

Strong North American stock markets have many positive implications

All four North American stock market indices – Dow Jones Industrials, the S&P 500, NASDAQ and the TSX (Toronto Stock Exchange) - recorded 52-week highs in the month just ended, January 2011. The indices have all made remarkable improvements. Here are some observations on the strength in equity prices.

January 26, 2011

Canadian upcoming showcase construction projects

The first half of 2011 will be a period of transition for construction activity. More specifically, the source of financing will begin to shift from the public sector to the private. When considering the outlook for construction, it is useful to compile a mental inventory of some of the largest projects that are likely to proceed in the months and years ahead. Individual large construction projects have an inordinate impact on the industry in terms of manpower and material requirements. They can also be tremendous confidence boosters for a regional economy. Think of these projects as the equivalents of blockbuster hits in the entertainment world.

January 17, 2011

How does China keep the value of its Yuan low?

A great deal of fuss has been made, particularly by U.S. government officials, over how China is gaining a foreign trade advantage by artificially keeping the value of its currency, the Yuan, low. While this is probably true, it begs the question, “How does China manage to do it?”

January 12, 2011

B.C.’s economic and construction outlooks a year after the Winter Olympics

It has been pointed out to me that total building permits in British Columbia declined 43% between October and November last year. I’ve been asked by some CanaData followers for my reaction and how I now feel about the B.C. economic and construction outlooks. Let me first say that the building permit series is quite volatile. There were six months of gains in the province prior to the latest setback, according to Statistics Canada. There are still a lot of reasons to be optimistic about B.C.

January 6, 2011

Globe-trotting to scope out 2011’s world economic outlook

Early January is an excellent time for globe-trotting to scope out what is happening in the world economy.

December 29, 2010

2010 review and 2011 outlook for Canadian non-residential construction starts

According to CanaData – the forecasting and statistics-gathering arm of Reed Construction Data-Canada – non-residential building starts nation-wide are at a pace to reach 74.0 million square feet in this current year, 2010. That’s compared with only 50.3 million square feet in 2009. The most recent peak occurred in 2007 at 92.1 million square feet. Most of the gain in 2010 has come from institutional work, with a slight helping hand from commercial. Institutional starts in 2010 will rise to their highest annual level since the 1970s.

December 15, 2010

Does Mark Carney understand how much it costs to live nowadays?

Bank of Canada Governor Mark Carney has taken it upon himself to lecture Canadians about their excessive debt loads. The average household is said to be close to underwater with accumulated loans one and a half times discretionary incomes. He has a point. Interest rates are near record lows. When they start to climb in about the middle of next year, the effect on carrying costs may be devastating. Still, I’d like to share a different perspective. Does Mr. Carney fully grasp how much it costs to live nowadays? There is a good reason for the heavy debt that many of us are encumbered with. It’s called survival.

December 9, 2010

A possibly problematic U.S. yield curve and lessons to be learned from Australia

The compromise that President Obama has reached with the Republicans on taxes is playing out in U.S. interest rates in interesting ways. It is one among several factors working to raise U.S. long-term bond yields. This article also contends that Australia’s economy has much to teach Canada about the changing world order.

December 2, 2010

Lots of baby steps forward in the U.S. are starting to yield real progress

Better news on the U.S. economy has been accumulating of late. This story sets out several examples, covering the stock markets, the PMI of the ISM and motor vehicle sales within the context of overall retail spending.

November 24, 2010

U.S. initial jobless claims improve dramatically in latest week

U.S. initial jobless claims for the week ending November 20 dropped to only 407,000, according to the U.S. Department of Labor (Employment and Training Administration Division). This marked a decline of 34,000 versus the week before. The latest figure is the lowest in more than two years dating back to July 2008. It is very good news. It means the improvement in U.S. labor markets has taken firmer hold.

November 19, 2010

Legerdemain and Misdirection – The Debate over the Fed’s Mandate

Classic political spin tries to perform magic by means of misdirection. A measure of this is currently underway with regard to the debate over the mandate of the U.S. Federal Reserve. Twenty-three persons of prominence have signed a letter to Chairman, Ben Bernanke warning against the Fed’s plan to purchase $600 billion in U.S. Treasury bills. It is contended this will lead to a surge in inflation and a devaluation of the U.S. dollar, while not really helping the economy much. While this is a legitimate concern, there is a political agenda being advanced.

November 11, 2010

Volatility in world trade playing out in currency values and commodity prices

Huge trade imbalances (China and Japan in surplus and the U.S. in deficit), ongoing European sovereign debt worries (Greece, Ireland, Italy, Spain and Portugal) and the U.S. Federal Reserve’s plan to print more money ($600 billion) are playing havoc with currency markets. The ramifications on individual nations’ gross domestic product (GDP) growth rates can be severe.

November 4, 2010

Turning back the clock

There is a societal change underway that analysts, politicians and indeed all of us should be aware of. Everyone knows that the post-war WWII baby boom generation (born 1946 to 1966 in Canada) is growing older. But what does this means in terms of outlook and political leanings?

November 3, 2010

What do the U.S. mid-term election results mean for Canada?

The November 2 mid-term election results in the U.S. have pushed that nation onto the same ground where a number of other sovereign states are currently standing. Discomfort and uncertainty about the future have stymied electorates in many jurisdictions around the world. Similar to minority governments elsewhere, the U.S. has shifted to an almost even balance between a Democrat in the White House, an almost split but still Democratic-led Senate, and a Republican-controlled House of Representatives. Washington lies under threat of gridlock.

October 29, 2010

Canada well positioned to benefit from new world order

Canada is fortunate in having a wealth of base and precious metals, fossil fuels, uranium, potash, forestry products and other raw materials that the world wants. The Canadian dollar is moving up and down according to what happens with commodity prices and demand from emerging nations. One result has been a value for the Canadian dollar that is pushing up against parity with the U.S. dollar. The two defining influences for Canada over the next decade will be global commodity prices and mega construction projects. The environment has also moved high on the agenda. Cleaner air is an important legacy issue for the next generation. This must also accommodate future income and job opportunities, including cutting-edge research and remediation efforts. Across the economy, success will depend on acquiring the skills to strike the right balance.

October 21, 2010

Canada’s September leading indicator index falls after 15 months of gains

For the first time in more than a year, the leading indicator index published by Statistics Canada declined on a month-to-month basis in September. This is consistent with other accumulating evidence that the Canadian economy is slowing down. A major problem for Canadian industry is the sluggish economy in the United States. In the latest week, the number of first-time out-of-work insurance seekers in the U.S. dropped by 23,000. That sounds like a dramatic improvement, but it’s partly because the previous week’s figure was revised upwards by 13,000.

October 13, 2010

Canada’s September year-to-date construction starts up strongly in almost all categories

Total construction starts in Canada were +62% in square footage and +55% in dollar volume terms through September of this year versus the first three quarters of last year, according to CanaData, the forecasting and statistical arm of Reed Construction Data Canada.

October 13, 2010

Canada’s September year-to-date construction starts up strongly in almost all categories

Total construction starts in Canada were +62% in square footage and +55% in dollar volume terms through September of this year versus the first three quarters of last year, according to CanaData, the forecasting and statistical arm of Reed Construction Data Canada.

October 7, 2010

Potential disputes are simmering over imbalances in world trade

Each of the world’s economic neighborhoods has its own idiosyncrasies. The post-recession Toronto G20 Summit in early summer was supposed to achieve balanced growth among nations and reduce trade conflicts. What has since transpired has not been a roaring success.

October 7, 2010

Potential disputes are simmering over imbalances in world trade

Each of the world’s economic neighborhoods has its own idiosyncrasies. The post-recession Toronto G20 Summit in early summer was supposed to achieve balanced growth among nations and reduce trade conflicts. What has since transpired has not been a roaring success.

September 25, 2010

The skill lies in the balance

It’s a beautiful fall day in Ontario, with a slight chill in the air – a good time to take a spin around the world. There’s something strange going on. Has there ever before been a time of so many legislatures in uneasy equilibrium?

September 25, 2010

The skill lies in the balance

It’s a beautiful fall day in Ontario, with a slight chill in the air – a good time to take a spin around the world. There’s something strange going on. Has there ever before been a time of so many legislatures in uneasy equilibrium?

September 16, 2010

U.S. initial jobless claims point to no double dip

U.S. initial jobless claims in the week ending September 11 were 450,000, according to the Department of Labor. A figure in the mid-400,000s is good news for the economy and lowers the likelihood of a double-dip recession. There were worries a month ago when the initial jobless level shot back up to 500,000 in the middle of August, after showing improvement throughout the spring and early summer. Those fears have been put to rest for the moment. This will be good news for stock markets and for the value of the U.S. dollar. In bond markets, the reduced uncertainty about future economic prospects will reduce some of the buying pressure.

September 10, 2010

Canada’s construction sector added another 12,000 jobs in August

A significant story is unfolding in the comparison of employment in construction (+7.9% year over year) versus manufacturing (-0.4% after many years below 0.0%). There are only 500,000 more jobs in manufacturing than in construction. A decade ago, the degree of separation was 1.4 million more jobs in production-line work than in the field. The convergence has been dramatic.

September 2, 2010

For Canada, the longer-term outlook is largely about commodities

The world economic order is changing and this is to Canada’s benefit. China, India, Brazil and several nations in Southeast Asia are growing at rates near or above double-digit percentages. These countries are becoming less dependent on exporting cheap goods and more reliant on domestic demand from their rapidly expanding middle classes. The newly affluent are cultivating a taste for better quality consumer goods and nutritional fare. Canada, with its abundant natural resources in base materials and agricultural products, is ideally suited to serve those needs.

August 27, 2010

Canada’s construction starts in a transition phase

Into the early part of next year, total output in Canada will continue to be carried forward by public sector investment. The deadline for completing governmental construction projects, with a guarantee of Ottawa’s share of the funding, is March 30th, the federal budget’s close-off date. New starts, however, will tail off until the private sector becomes more fully engaged again. The launching pad for such commitments is likely to be resource sector capacity expansions.

August 19, 2010

U.S. initial jobless claims rise to half a million again

The latest initial jobless claims report from the U.S. Department of Labor contains disturbing news. The number of first-time unemployment insurance applicants has climbed back up to the benchmark 500,000 level. The jobs recovery has stalled and this will have negative implications in several ways. The jobs recovery has stalled and this will have negative implications in several ways.

August 6, 2010

It’s been 35 years since institutional construction starts as strong

Anyone who has any doubts about the level of government commitment to stimulus projects should simply take a look at CanaData’s institutional construction starts.

July 28, 2010

Canadian railway freight traffic on a better track

The obvious bellwether statistics on the economy include gross domestic product, foreign trade, the inflation rate, interest rates and labor market statistics. But there are also a number of other indicators that may not receive quite as much attention. Statistics Canada, particularly in its report entitled The Daily, is an excellent source for some of the more significant, but less reported, data on the economy. For example, railroad traffic is sometimes taken to be a proxy for overall economic activity in the country. From data on RR traffic, there is much to be learned about the movement and sales of commodities and manufactured goods. This has implications for the direction that future construction investment might take.

July 16, 2010

Waiting to see if the other shoe drops in Canada

Statistics Canada's leading indicator index has been moving upward for the past 13 months in a row. However, there are forces currently at work internationally, more than domestically, that indicate there may be an easing in the series through the summer and into the fall.

July 7, 2010

Who wants Canada’s oil?

There have recently been reports in the press and over the airwaves that a powerful U.S. House Democrat, Henry Waxman, is launching a strong campaign to block a pipeline that would deliver oil to Texas refineries from Alberta’s Oil Sands. The objection centers on such a source of energy being excessively “dirty” from an environmental standpoint. This is a deeply hypocritical argument.

June 30, 2010

Canada’s population moves above 34 million

As of April 1, Canada’s population surpassed 34 million, according to Statistics Canada. That’s not a huge number, among international sovereign states, but it is quite respectable nonetheless. Population change is an important yardstick in several ways.

June 21, 2010

The good, the bad and the ugly about the HST

As of July 1 2010, the basket of goods and services covered under two provincial sales tax regimes will be stretched much wider. The cause will be a shift to harmonized sales taxes (HST) coordinated with the federal government. What I don’t like about the harmonized sales tax is also what I do like about it. It’s a tax grab. Let me explain.

June 9, 2010

The dual role played by commodities in construction

The construction industry is uniquely situated when it comes to commodities. The raw materials that are traded on international exchanges are base components of almost all building products. Construction material costs are heavily influenced by the change in the world price of oil, natural gas, copper, nickel, lumber, steel, cement and aluminum. But there is another side to commodity pricing for the building industry. Some of the largest construction projects in the country are driven by demand for and the price of raw materials.

June 2, 2010

Problems for the public sector from Canada’s population projections

Statistics Canada recently released its projections of Canada's population out to 2036. The demographic shifts make for fascinating reading. Perhaps the most significant statistics can be found in the dependency ratios. These have tremendous implications for the public sector’s capacity to fund pension plans and medical care.

May 25, 2010

Post-war baby boomers and their pension plans

In a report released today, Statistics Canada discusses the coverage and composition of registered pension plans (RPPs) in the country as of January 1, 2009. There are significant economic implications. The report presents the facts. Most of the analytical comments are my own.

May 14, 2010

A world economy on the mend, but also in flux

The U.S. and Canadian economies are currently moving ahead about as quickly as is humanly possible. Canada added 109,000 jobs in April. The U.S. created 290,000 new positions. However, that still leaves the U.S. about 8.0 million positions below where it was when the recession started in early 2008. Let’s look at some of the other issues facing our economies.

May 6, 2010

Like Rocky, Alberta has comeback potential

This article sets out some rapid-fire observations about Alberta’s economic prospects in light of Canada’s strong gross domestic product (GDP) showing of late and rapid growth in emerging nations.

April 29, 2010

U.S. Federal Reserve will stand pat on interest rates for an extended period

Coming out of its Federal Open Market Committee meeting yesterday, the Federal Reserve in the United States committed to keeping its policy-setting interest rate, the federal funds rate, at its current record-low level “for an extended period.” But there was one dissenting opinion and today's initial jobless claims report confirms how difficult it has been for the U.S. economy to break out of recession's grip.

April 23, 2010

U.S. new home sales increase more than one-quarter in March

Sales of new single-family housing in the United States jumped from 324,000 units in February to 411,000 units in March, according to the latest data set from the U.S. Census Bureau and the Department of Housing and Urban Development. This was a month-to-month increase of 27%. This is very good news for the U.S. housing sector. Admittedly, part of the explanation may be the imminent expiry of the $8,000 first-time homebuyer tax credit at the end of April. Nevertheless, the industry has needed a shot in the arm and that has been delivered effectively.

April 16, 2010

A little better balance is coming to Canadian home resale markets

Existing home owners in Canada have recognized an opportunity and reacted accordingly. The number of new listings in the first quarter of this year (233,402) has been an all-time record for the first three months of any year, according to the Canadian Real Estate Association (CREA).

April 7, 2010

Spring 2010 comments on Canada’s economic outlook

The outlook for interest rates in Canada is a little more hawkish than in most other countries. Core inflation (which ignores energy and food prices) in this country has already exceeded the Bank of Canada’s (BOC) target of 2.0%, although not by much. The United States, on the other hand, has a core inflation rate that has dropped to only 1.3%. The BOC is therefore likely to take action sooner than the Federal Reserve. This has implications for the overall Canadian economy and for many of the provincial economies that are dependent on currency values, the price of commodities and international trade.

April 1, 2010

Some of the more interesting Canadian city housing starts statistics from 2009

The following are some interesting statistics on 2009 housing starts in Canada. The national total dropped from 211,000 units to 149,000 units, a decline of nearly 30%. Singles made up a significantly larger share of the total market, 50.7% in 2009 versus 44.1% in 2008. But this article mainly concentrates on what happened in some of the major cities across the nation.

March 26, 2010

Ontario talks tough about its deficit

Ontario has made it clear which side of the divide it stands on with respect to talking up stimulus or talking down deficits in its provincial budget for 2010-2011, which was released yesterday. The public stance is to take a supposed hard line on spending. Whether this will actually materialize, however, is a matter of conjecture as the following paragraphs will show.

March 17, 2010

Sub-sector investment spending intentions from Statistics Canada’s latest survey

The following are some key sub-sector results from Statistics Canada’s 2010 Public and Private Investment survey. Capital spending intentions by 28,000 owners in the private and public sectors were collected and tabulated between October 2009 and late January 2010. The grand total national figure projects a 5.1% gain in capital spending on construction between 2009 and 2010.

March 9, 2010

A dozen incredible measurement sets on Canada’s changing ethnic mix

It’s a good idea to keep checking the Statistics Canada web site. You never know what you’ll find. Included among today’s releases by the national statistical agency is a 78-page report entitled Projections of the Diversity of the Canadian Population. This compares the likely ethno-cultural make-up of the country in 2031 versus what it was in 2006. The data is fascinating.

March 3, 2010

How fragile is recovery around the world?

The big question in the U.S. concerns whether or not a double dip recession is in the cards. The main contributors to the speculation are the jobless nature of the recovery so far and both weak new home sales and low home prices. These several problems spill over into many other areas.

February 25, 2010

The world financial crisis goes into extra innings

Economic statistics, tables and graphs aren’t just abstract concepts. Sometimes what they reveal results in policies that spill over into the streets. Such is the case in some countries in Europe.

February 18, 2010

Despite recovery, many of the world’s governments are immersed in financial turmoil

Several national governments around the world are in severe financial binds, with actual and projected budgetary deficits in double digits as percentages of gross domestic product. Included are the United States, Britain, Spain and Greece. If not fiscal deficits that are the problem, then it’s incipient inflation. How this will play out in interest and exchange rates is anybody’s guess.

February 11, 2010

Government moves in the housing sector and the in-your-face green movement

There are some interesting aspects to the recent pick-up in housing starts in Canada. It is largely due to the strength in resale markets, which in turn is tied to record-low mortgage rates. The Bank of Canada is expected to begin raising interest rates by this summer at the latest. That may serve to slow down housing starts somewhat. The introduction of the blended or harmonized sales tax in Ontario and B.C. is another factor that may be hurrying up starts at the moment in anticipation of higher costs for home purchasers later this year. At the same time, there are other governmental actions that may have significant impacts on the housing market. What is particularly noteworthy is that they will act in opposite directions.

February 3, 2010

A review of some global economic and policy expectations for 2010

It’s always fun to get out the crystal ball and venture a look. Hidden among the swirling clouds are some half-revealed truths that can usually be interpreted in a number of ways. But the following is an attempt to condense some of the more important developments with a focus on what they will mean for the world and North American economies and government policies.

January 28, 2010

Increasing signs of world and U.S. economies getting back on track

There are increasing signs that the world and U.S. economies are getting back on track. One indicator is the subject matter in daily news briefs.

January 28, 2010

Synopsis of RCD’s webinar on the economic and construciton outlooks

The following are highlight observations from the Webinar hosted today by Reed Construction Data (RCD). Featured speakers were Ken Simonson (Associated General Contractors of America), Kermit Baker (American Institute of Architects) and Jim Haughey (RCD).

January 28, 2010

Synopsis of RCD’s webinar on the economic and construction outlooks

The following are highlight observations from the Webinar hosted today by Reed Construction Data (RCD). Featured speakers were Ken Simonson (Associated General Contractors of America), Kermit Baker (American Institute of Architects) and Jim Haughey (RCD).

January 21, 2010

Why Canada’s inflation rate disappointed some analysts and the full circle argument

Apparently, many analysts were disappointed that Canada’s inflation rate wasn’t high enough in December 2009. The all-items Consumer Price Index (CPI) was +1.3% year over year. The Bank of Canada’s target is +2.0%. The shortfall took some of the luster off the loonie and stock prices. But let’s not be in too big a hurry to see inflation climb in Canada. On balance, the BOC should not be afraid to raise interest rates before the Fed.

January 14, 2010

Ontario, B.C. and Alberta suffered severe labour market dislocations in 2009

Nearly 60% of the jobs lost in Canada in 2009 were in Ontario. To understand how severe this was, consider that Ontario’s labour force makes up slightly less than 40% of the national total. Out of the national job loss figure of 240,000, Ontario’s portion was 142,000. The year-over-year decline in employment in the province at -2.1% was the most extreme in the country and higher than the national average rate of -1.4%. The manufacturing sector bore most of the pain. The other two provinces that struggled the most to provide jobs were B.C. and Alberta.

January 7, 2010

The Trend of Canada’s Construction Starts in 2009 will Reverse Somewhat in 2010

The trend in construction starts in 2009 became clear early on and stayed the same as the year unfolded. Commercial building starts in the nation as a whole, according to CanaData, ended 2009 down nearly 50% in square footage versus all of 2008. Industrial starts dropped by three-quarters or -75%. Those two categories mainly depend on private sector investment. On the public sector side, institutional starts were down only 8%. And engineering starts were lower by only a small degree, -2% in dollar volume. However, this fresh new year will see a reversal of some of the trends from 2009.

December 18, 2009

CanaData starts in November included more privately-funded projects

CanaData’s starts statistics still looked barren through November. In square footage, commercial work was about half of what it was last year and industrial starts were only about one-quarter as high. It is clear that the two segments of the overall market that have held up better are in the public spending area – institutional and engineering.

December 9, 2009

The Economic Outlook for Toronto - Thinking Ahead to the Pan-Am Games

Yes, the Pan American Games will provide a significant boost for Toronto's economy. And 2015 is not that far away. This city needs something to get charged up about.

November 30, 2009

Canada’s third-quarter GDP growth turns mildly positive, but the struggle continues

It’s no longer life or death, but the Canadian economy continues to struggle. Statistics Canada released September and third quarter real gross domestic product (GDP) results on the last day of November. The month-to-month gain (not annualized) was +0.4%. The quarter-over-quarter gain (annualized) was also +0.4%. The quarter-over-quarter change was the first increase since the third quarter of 2008. It marks the end of the recession after three straight quarterly declines.

November 19, 2009

Starts remain low in CanaData’s latest forecasts, but there are signs of a pickup in optimism

CanaData’s forecast for total non-residential building construction starts nation-wide in 2009 now stands at 45.5 million square feet. This is about half of what it was two years ago in 2007 at 92.1 million. Last year was the first year of decline in the recession and the square footage of ICI starts (industrial, commercial and institutional) dropped to 75.5 million. The new slightly revised forecasts for 2010 and 2011 are for 56.0 million and 70.0 million square feet respectively.

November 11, 2009

CanaData’s October Construction Starts and Remembering Planned Obsolescence with Some Fondness

Industrial starts have become a non-factor in overall construction activity in Canada. They are going to amount to less than two million square feet in 2009, which is less than one good-sized shopping mall when times are better. How did industrial work come to such a sorry pass?

November 4, 2009

It’s a World of Opportunities as Economic Thoughts Turn to Recovery

The current mantra about the world economy seems to be that no one can take recovery for granted until the private sector replaces the public sector as the source of new demand. Central bankers, with few exceptions (e.g., Australia) are unlikely to alter their extraordinarily low interest rate policies until unemployment stops rising and the need for government stimulus money winds down. A thorough read of the daily business news, however, reveals that a great deal more is going on behind the scenes and that some business owners and managers are attempting to get out front of events while tremendous opportunities are still available.

October 28, 2009

Housing markets in Canada and U.S. tell complex stories

The housing markets in Canada and the U.S. continue to tell complex stories. Canada’s housing starts have been gradually creeping up since their April low. For 2009 as a whole, they are expected to be 140,000 units, rising to 160,000 in 2010, then 180,000 in 2011. The stock of unsold single-family homes in Canada is adjusting downward in an appropriate fashion, but the unsold stock of multiples is still climbing. In the U.S., the monthly annualized starts number is just under 600,000 units. Similar to Canada, the improvement next year will be only gradual, to 700,000 units, with a further modest gain in 2011 to 900,000.

October 22, 2009

The Current Grace Period for Construction Costs will Expire within Six Months

Several factors are conspiring to give construction costs a lift. This won’t happen overnight. But it does mean that sometime in the next six months, the current grace period will expire.

October 15, 2009

What Happens when the Loonie shoots past Parity with the Greenback?

Once again, the Canadian dollar is flirting with U.S. dollar parity. What will be the consequences if the loonie shoots past parity with the greenback? How much worse (or better) will things get?

October 8, 2009

More Variety in CanaData’s September Starts Statistics

For the first time in many months, there is a little more variety of projects in CanaData’s Top 10 list of construction starts in September. Mixed in with the institutional and engineering projects which have been dominant since April are a couple of multi-unit residential projects in Quebec City and a commercial project in Alberta. The latter is the Telus World of Science building in Calgary. As for Quebec, its experience of the recession has not been as severe as for many other provinces.

September 30, 2009

Take Reports of Alberta’s Economic Demise with a Grain of Salt

Take all the reports about the economic demise of Alberta with a grain of salt. In the latest quarter, the fastest population growth rate among all provinces in the country was recorded there (+0.59%), according to the latest demographic report from Statistics Canada. Second place went to Prince Edward Island (+0.53%). The territory of Nunavut actually outpaced all regions (+0.68%). The total Canada rate of increase was +0.36% (Q2/Q1).

September 22, 2009

Questions to be addressed at CanaData’s 24th Annual Construction Industry Forecasts Conference

CanaData’s 24th annual Construction Industry Forecasts Conference will be held on Thursday, September 24th, at the Liberty Grand in Toronto. The following are some key questions and themes that will be addressed and dealt with during the day by the high-powered roster of speakers. Delegate networking will also be an important source of market intelligence.

September 16, 2009

Capacity Utilization Rates Capture the Hard Times and Point to Weak Construction

Many of the problems with the recessionary Canadian economy are revealed in the latest (Q2 09) capacity utilization numbers from Statistics Canada. Manufacturing in the second quarter of this year was operating at less than two-thirds of its capacity. It was the same case for forestry and logging. The mining sector was at only half of its capacity. Total Canadian industry in second-quarter 2009 had a capacity utilization rate of just 67.4%.

September 16, 2009

Capacity Utilization Rates Capture the Hard Times and Point to Weak Construction

Many of the problems with the recessionary Canadian economy are revealed in the latest (Q2 09) capacity utilization numbers from Statistics Canada. Manufacturing in the second quarter of this year was operating at less than two-thirds of its capacity. It was the same case for forestry and logging. The mining sector was at only half of its capacity. Total Canadian industry in second-quarter 2009 had a capacity utilization rate of just 67.4%.

September 9, 2009

CanaData’s Construction Starts Statistics are -49% in Square Feet through August

The pattern of construction starts in Canada in August 2009 was a continuation of what it has been throughout most of this year. A trend graph clearly points out what has been happening in the market-place. Non-residential building starts, which are mainly privately-financed, are experiencing a long slide that began early in 2008. Engineering starts, which are mainly publicly-funded, have been moving upward since the midway point of last year, although they appear to have leveled off over the past several months.

September 1, 2009

Overhang and Aftermath - Canada’s Construction Outlook, 2010 to 2012

The United States has been in recession since the final quarter of 2007. Canada has been experiencing economic weakness since the fall of last year. Both economies are expected to turn in positive growth in third-quarter 2009. Canada, in June, had its first month-to-month gain in gross domestic product (GDP) in a year. The economy is on the mend. But there are two words that set the tone for the economic future – overhang and aftermath.

August 26, 2009

The Growing Power of Social Networking Sites on the Internet

Social networking sites on the Internet may seem like a strange subject for a blog usually dedicated to construction economics, but please bear with me. There is relevance. One of the next big things in information technology or high-tech will be social networking sites. Yes, I know these have been around for a while and I may seem out of touch by only mentioning them now. However, they came to the greater consciousness of us all more emphatically during the aftermath of the election in Iran. We were getting our updates from citizens who were text messaging what was happening on the streets of Tehran to CNN. That was the most dramatic example of their usefulness. Here’s some background.

August 19, 2009

Institutional and Engineering Work sustain July Construction Starts in Canada

On a percentage change basis, CanaData’s year-to-date construction starts figures in July varied little from June. Total starts were -51% in square footage and -29% in dollars. The dollars have been sustained by engineering starts, which are +1% on a year-to-date basis, this year versus same period last year. Much of this has been thanks to government stimulus initiatives. The engineering or civil construction category is made up of projects, such as roads, bridges, sewer pipelines and watermains, where square footage is irrelevant. CanaData is a product line of Reed Construction Data.

August 13, 2009

Summer Review of Engineering Construction Outlook in Canada

CanaData’s engineering construction forecast now stands at $86.8 billion for 2009. This is -9.4% when compared with 2008’s $95.9 billion. The main reason for the decline is a cutback in spending by the energy sector in Alberta. Projects were put on hold as oil prices fell and producers got frustrated with input shortages and high costs. With oil prices on the mend, projects are being reinstated and new ones initiated, including on the East Coast. This sector is likely to be an add-on to government infrastructure work in 2010, returning overall engineering construction dollars to about $94.7 billion (+9.0%), then rising to $103.7 billion (+9.5%) in 2011.

August 11, 2009

Summer Review of Non-residential Building Construction Outlook in Canada

Privately-funded non-residential building construction in Canada is in a deep trough at this time. The only exception is institutional work, where governments are going ahead with school projects and health care/hospital work. Office buildings, retail projects and industrial plants all have their own reasons for a lack of construction job-site action at the moment.

August 5, 2009

Summer Review of the Residential Construction Outlook in Canada

The multi-country stimulus with respect to infrastructure is having an impact on economies in general and is spilling over into residential construction. China is increasing its money supply at a rapid pace to fund its spending programs. Lending in China is up by double in the first half of this year versus the same period last year. Chinese citizens are jumping into the housing market. A surge in housing construction is underway. China’s housing recovery is corresponding with the timing of an upturn in the U.S. housing market.

July 28, 2009

A New Version of Cyclical Instability in Construction

The construction industry has long been known for its cyclical instability. Construction activity has often had the widest amplitudes from peak to trough of any major sector in the economy. A new version of cyclical instability seems to be emerging. The old version was based on simultaneous boom and bust conditions in private and public sector investment spending. It was often the case that a cyclical decline in private sector work was met by a flurry of government projects to fill the gap. However, such government projects were never initiated quickly enough. They came on stream at the same time as private sector work was recovering. This compounded demands on labor and material. Where the new cyclical instability is coming from is the international scope of economic activity.

July 23, 2009

Canadian Construction Material Cost Changes Diverge Widely (Part 2)

In yesterday’s blog entry, I talked about what has been happening, longer term and more recently, in terms of key construction material prices. I covered foundation and structural materials − sand and gravel, cement, ready-mix concrete, iron ore, concrete reinforcing bars and structural steel shapes. Today, let’s look at some other key inputs and some equipment and machinery items. This is important in terms of what governments can expect in the bidding process that will precede their infrastructure spending initiatives.

July 22, 2009

Canadian Construction Material Cost Changes Diverge Widely (Part 1)

Based on the Industrial Product Price Index (IPPI) series published by Statistics Canada, this report sets out what has been happening, over the longer term and more recently, for some key materials used in the construction process. The information is current as of May 2009.

July 16, 2009

Wide Differences between Home Resale Markets in Canada and the U.S.

One of the key positives for Canada in this recession has been the vast difference between home real estate markets here versus in the United States. In Canada, new home construction began to decline only in the fall of last year, after the stock market collapsed, credit dried up and net job losses began. In the United States, housing starts have been on a path downward for three years, beginning in early 2006. But the residential market is not all about starts. It is highly dependent on existing-home resale markets as well and this report looks at some of the key measure in both countries.

July 15, 2009

Where is the Economic and Construction Action in Canada’s Major Cities?

It is always fascinating to consider what is happening in the major cities across the country. Which cities are in the vanguard and which are bringing up the rear? This is all about the economy at the local level. It ties in to economic sectors that are expanding, contracting or staying at an even keel. It often means assessing the outlook for raw material markets, although in larger urban centres, services play major roles. Generally speaking, diversity is good because it helps cities weather economic storms better.

July 7, 2009

Recession Regardless, It’s an Exciting World in High-tech

No question, this is a tough patch for the economy. But not all sectors are performing poorly or have the same prospects. For example, the high-tech sector is exploding with creativity. Not that it hasn’t gone through this before. But this is not a potential dot.com bust kind of scenario. The changes that are coming flow out of technology that is well established and many of the biggest and most well-known companies are involved.

June 29, 2009

The Two Biggest Issues for the World Economy

I’m betting that Ben Bernanke, Mark Carney, Jean-Claude Trichet, Mervyn King and others of their ilk – heads of central banks in the U.S., Canada, Europe and England respectively − are having some sleepless nights these day. The global economy is sailing off into uncharted waters that are full of sea monsters and tempests, with compass readings that are no longer accurate and few comely mermaids to guide them.

June 25, 2009

Five More Questions from the CanaData Webinar on the Economic and Construction Outlooks

During CanaData’s webinar on the economic and construction outlooks on Tuesday, June 23rd, I was not able to get to all of the questions that were submitted by viewers and participants. Therefore, this blog entry takes a stab at dealing with a number of the questions that remained outstanding after the event concluded.

June 16, 2009

Canada’s Merchandise Trade, Key Export Markets and Construction Opportunities

Canada’s merchandise trade position fell into deficit again in April 2009. This was the third month of deficit in the last six months of awesomely weak trade numbers. Canada usually runs an annualized trade surplus of around $50 billion. It is no coincidence that the recession is coinciding with the nation’s poor performance on the trade front. What is needed for Canada to see an improvement in its trade position?

June 10, 2009

Construction Starts, Commodity Position Limits, Oil Prices and the Loonie

The first half of 2009 is almost complete and the pattern of Canada’s construction starts has not altered much since the beginning of the year. But change is in the works and the following looks at where some of the major pluses and minuses will arise.

June 4, 2009

The United States needs Canada

I have written before about the benefits of a joint currency and common market between the United States and Canada. Unique in the history of the U.S. and Canada, the former needs the latter to a greater degree than ever before, whether it knows it or not. Future investment plans and mega construction projects are hanging in the balance. The time may have finally come to bond further in ways that will help each of us realize our long-term goals.

June 1, 2009

Ontario’s Prosperity may depend on a Stronger-valued Loonie

This story turns conventional wisdom on its head. A lower-valued Canadian dollar is supposed to be good for Central Canada’s economy because it helps manufacturers make export sales to the U.S. and it reduces the incentive for Canadians to travel abroad. However, in the new economy that is emerging, a higher-valued Canadian dollar may actually benefit central Canada, and particularly Ontario, to a greater extent overall.

May 27, 2009

Due to the Recession, Electric Power Markets in Ontario and Québec are in a Strange Space

The recession is having impacts on construction in ways that may not, at first, be readily apparent. For example, electric power usage in North America is currently in what might be termed a brief hiatus. Longer-term, it is hard to image that the need for electricity can be anything but expansive. This will be particularly true for power that can be generated in an environmentally friendly way. However, in the short-term, with raw materials production and manufacturing in recessionary decline, power usage has dropped.

May 21, 2009

Ten Key Differences between the Current Recession and the Great Depression

There are many ways in which the current recession differs from the Great Depression of the 1930s. Ten key points of variation can be separated into four socio-economic categories.

May 12, 2009

Obama Nation or Abomination? - The Two Polarities in U.S. Politics

I could not resist the headline to this article. Maybe it has been used before by someone else. But it came to me while thinking about some of the top U.S. news programs. Apparently you are either for Barack Obama or very much against him. The U.S. will either prosper as the new Obama Nation, which involves more government intervention, or it will become an abomination as socialist policies lead to rapid decline.

May 7, 2009

CanaData’s Construction Starts are Depressed, But a Familiar Pattern is Emerging

CanaData’s construction starts statistics through April 2009 remain quite depressed. Total square footage in all categories of construction is -52% year to date versus the first four months of last year. The dollar volume of starts is -30%. That being said, however, an interesting pattern has emerged within the type-of-structure categories and it shows up most readily in the Top 10 starts list for the month. Nine of the top 10 construction project starts in April were either engineering or institutional work.

May 1, 2009

Demography in Canada and the Swine Flu Pandemic

In my previous blog entry, I reviewed many of the regional economic developments in Canada. Today, let’s look at the latest demographic report from Statistics Canada. Quite often, demographic shifts are a consequence of what has been happening on the economic front. Here are some of the more significant developments for the nation and the regions as reported by Statistics Canada for the fourth-quarter of 2008.

April 30, 2009

Twists and Turns in Provincial GDP Growth

This recession is taking some interesting twists and turns at the regional level. Statistics Canada has just published Gross Domestic Product (GDP) figures for the provinces, 2008 versus 2007. This report takes those numbers and looks forward through 2009 and beyond.

April 27, 2009

A North American Common Market and Common Currency

This blog entry is a little more speculative than most, with a longer-term time horizon. It looks further down the road. Sometime, not tomorrow, not even five or ten years from now, but eventually, there are circumstances under which it will be just about inevitable that Canada, the United States and Mexico will combine as one seamless market with a common currency. The set of conditions taking us in that direction are as follows.

April 22, 2009

2009 Investment Spending Intentions by Canadian Business Owners and Government Agencies

There are lots of interesting numbers from Statistics Canada’s latest survey of owners concerning their investment spending plans. This information is published in a report entitled Private and Public Investment in Canada, Intentions (catalogue number 61-205-X). The PPI survey is how it is often referred to in its shortened form.

April 17, 2009

Major Issues Facing Canada’s Construction Industry to the End of this Year

The following is a compendium of major issues for construction in Canada out to the end of 2009. Market forces are a swirling mix of demand, supply, price, regional, country-wide and international factors.

April 17, 2009

Major Issues Facing Canada’s Construction Industry to the End of this Year

The following is a compendium of major issues for construction in Canada out to the end of 2009. Market forces are a swirling mix of demand, supply, price, regional, country-wide and international factors.

April 12, 2009

The Economic Crisis Six Months Later and the Role of Leadership

Is President Obama taking on too much? Yes, but this is a complex issue with nuanced levels of significance. Never mind foreign trouble spots like Afghanistan, North Korea and the Israeli-Palestinian conflict. And set aside the issue of expanding health care for the moment. Let’s just look at the economy.

April 7, 2009

Private Non-residential Construction Starts in Canada Sink Rapidly in First Quarter

Through the first quarter of 2009, non-residential construction starts in Canada are headed significantly downward. This is in keeping with the latest revision to CanaData’s forecast which is calling for total non-residential building starts this year, at 54.0 million square feet, to be the lowest in the history of the series, dating back to 1970. First-quarter regional highlights and low points are also examined in this report.

April 3, 2009

The U.S. Labor Market, Problems in the Auto Sector and the Construction Investment Climate

The U.S. jobs picture continued to deteriorate in the latest month. What is just as disturbing is that the downward sloping employment curve is not showing any signs of flattening out yet. Exceptionally high initial jobless gave advance warning that this might be the case. Nevertheless, it is upsetting to see that total job losses in the U.S. now exceed five million since the month-to-month declines began in January 2008.

March 31, 2009

The G20 – A Diversity of Goals and Answers

In a time of global recession, the interests of the G20 nations are of particular importance. They define much of what will be happening in political and economic circles over the near and longer terms. As outlined in this report, three clear themes have emerged having to do with fiscal stimulus, greater regulation and expanding roles. Within these themes, there are different assessments of importance and weight. Versus the G7 and G8, the G20 marks a significant shift to global economic management.

March 27, 2009

The Ontario Provincial Budget − Mobilizing on the Infrastructure Front

Yesterday’s Ontario provincial budget contained measures to stimulate business investment, to lower corporate taxes and to reduce sales-tax administration charges. But the major initiative was in the area of infrastructure spending. This has been a consistent theme of governments around the world. Who knows if all this money will ever really be spent? To a considerable degree, Premier McGuinty, Prime Minister Stephen Harper and President Barack Obama are all trying to do the same thing, talk us out of this recession. This report also looks at some questionable aspects of the new proposed harmonized sales tax (HST) with respect to residential construction.

March 25, 2009

The World Reserve Currency Debate - Dollar, Euro, Yen or Yuan?

Currency markets may be in for a period of some turmoil. The Chinese and Japanese governments are becoming less enamored of holding large amounts of U.S. government debt. There are several reasons why China and Japan might worry about a decline in the value of the greenback that would depreciate the value of Treasury Bill holdings. This report examines why the greenback is at the top of the heap rather than the Euro and why some nations may start to lobby for wider usage of Special Drawing Rights.

March 23, 2009

The Canadian and U.S. Economies - Where do We Stand?

How do we know when recessions are ending? What are the signposts? When do we definitively know that things have turned around?

March 12, 2009

The World Financial Crisis, Phase Whatever − Eastern Bloc Countries Going Bankrupt

Haven’t heard enough yet about problems in the world economy? Here’s the latest. It’s not just individuals and companies that are going bankrupt. There are some whole countries that are sinking fast or just barely treading water. This is primarily in smaller emerging markets and the dynamics are discussed in this report.

March 10, 2009

How to Behave in the Recession and Two Sidebars on Gold Prices and Mortgage Rates

As an economist, I know that what is best for this current recessionary economy is that everybody who can afford to keep on spending continues to do so. However, the reality is that a different hunker-down mindset is taking over. Two-income families have to consider the possibility that they may soon become one-income and so on. The trend to more conservative courses of action is occurring against the backdrop of job losses, rising bankruptcies and creditors demanding payment. But not all is bleak. Those who are still employed are getting a break in several ways. Let’s take a look.