Lots of mixed messages out there about the state of the Canadian economy. It has been underwhelming, to be sure, with five consecutive months of negative GDP growth to start the year. Some economists say a recession is assured, barring a June GDP miracle.
Others, such as the usually upbeat Carlos Gomes, sr. economist with Scotiabank, continue to cite strong underlying fundaments as reason for optimism.
I’ll have a full report on the Canadian economy in the September issue. I can’t give it all away now. But here are a few words from Gomes, who, by the way, will be providing an economic overview at our Surface Transportation Summit Oct. 14. Over to you, Carlos:
“If you look at domestic activity, it remains very resilient. Consumer spending is doing well. Auto sales are at record highs. Housing activity is buoyant. Employment conditions have actually accelerated over the past year to about an average of 16,000 jobs created each month. That’s a significant improvement from an average of about 10,000 during the previous two years. One part of the economy is doing well, however there is significant weakness on both the business investment side and the export side. That’s really the concern.”
He also suggested we may be able to ride the coattails of a strengthening US economy, at least for a while. Carlos:
“I think the key point here is that we’ve started to see the US numbers get better. The first quarter GDP in the US came in at 0.6%. The second quarter, came in at 2.3%, a clear step up from where it had been. We’re expecting growth in excess of 2.5% for the remainder of 2015 and maybe a small and further improvement in 2016. I think that would go a long way in providing additional support for the Canadian manufacturing sector.”
James Menzies is editor of Truck News magazine. He has been covering the Canadian trucking industry for more than 15 years and holds a CDL. Reach him at email@example.com or follow him on Twitter at @JamesMenzies. All posts by James Menzies