OTTAWA – Canada has fallen into a recession that is likely to result in about 100,000 lost jobs over the next few months, according to forecasting firm Global Insight.
In a forecast to be officially released Wednesday, Global Insight says the Canadian economy will suffer two consecutive quarters of negative growth – the technical definition of a recession – starting in the last three months of this year.
And it won't be a close call.
Managing director Dale Orr says the October-December period will see the economy shrinking by 1.4 per cent on an annualized basis, with a further 1.2 per cent contraction in the first quarter of 2009.
Orr noted Canada has undergone a full year of slow, near-zero growth, but that has been mostly confined to the exports sector and been reflected in lower corporate profits.
The next few months will "feel like a recession" because more Canadians are going to start losing their jobs – predicting 100,000 net job loss during the first three quarters of 2009.
"That's still a mild recession," he said, "because we have just two negative quarters of growth and labour markets are still holding up relatively well. We have the unemployment rate ending the year at 7.2 per cent, which for Canada historically is not that bad."
Still, Orr says Canada's economy will record zero growth for the entire 2009.
Global Insight is not known for taking extreme positions in its forecasts, but the newest projections place it among a growing number – including the Bank of Nova Scotia, Merrill Lynch and Toronto-Dominion Bank – who say Canada's economy has crossed the line into recession.
Last month, the Bank of Canada downgraded the country's official growth forecast but predicted only a moderate retreat of 0.3 per cent in the fourth quarter of this year, following by mild growth of 0.6 per cent next year.
The Bank of Montreal predicts in a report issued Tuesday that the deepening recession in the United States and slower demand in developing economies such as China, will keep commodity prices subdued at least through next year.
BMO's commodity price index plummeted 16.7 per cent in October with all commodity groups suffering major losses.
Oil prices plunged 26.2 per cent in October and are unlikely to recover any time soon.
BMO says it expects oil will average about US$70 a barrel in 2009, from this year's US$102 average.
One of the few commodities expected to improve next year is lumber, BMO says. But that is because prices are currently at or below operating costs.
http://www.thestar.com/business/article/534769
In a forecast to be officially released Wednesday, Global Insight says the Canadian economy will suffer two consecutive quarters of negative growth – the technical definition of a recession – starting in the last three months of this year.
And it won't be a close call.
Managing director Dale Orr says the October-December period will see the economy shrinking by 1.4 per cent on an annualized basis, with a further 1.2 per cent contraction in the first quarter of 2009.
Orr noted Canada has undergone a full year of slow, near-zero growth, but that has been mostly confined to the exports sector and been reflected in lower corporate profits.
The next few months will "feel like a recession" because more Canadians are going to start losing their jobs – predicting 100,000 net job loss during the first three quarters of 2009.
"That's still a mild recession," he said, "because we have just two negative quarters of growth and labour markets are still holding up relatively well. We have the unemployment rate ending the year at 7.2 per cent, which for Canada historically is not that bad."
Still, Orr says Canada's economy will record zero growth for the entire 2009.
Global Insight is not known for taking extreme positions in its forecasts, but the newest projections place it among a growing number – including the Bank of Nova Scotia, Merrill Lynch and Toronto-Dominion Bank – who say Canada's economy has crossed the line into recession.
Last month, the Bank of Canada downgraded the country's official growth forecast but predicted only a moderate retreat of 0.3 per cent in the fourth quarter of this year, following by mild growth of 0.6 per cent next year.
The Bank of Montreal predicts in a report issued Tuesday that the deepening recession in the United States and slower demand in developing economies such as China, will keep commodity prices subdued at least through next year.
BMO's commodity price index plummeted 16.7 per cent in October with all commodity groups suffering major losses.
Oil prices plunged 26.2 per cent in October and are unlikely to recover any time soon.
BMO says it expects oil will average about US$70 a barrel in 2009, from this year's US$102 average.
One of the few commodities expected to improve next year is lumber, BMO says. But that is because prices are currently at or below operating costs.
http://www.thestar.com/business/article/534769
