CANADA’S ECONOMY REMAINS ROBUST
Last week the August the housing starts was out and it showed a 9.6%
monthly decline. Although the news was bad on the surface, a closer look
showed a more optimistic picture. “For example, over the last year there
have been two instances where housing starts registered double digit
declines. To look past this volatility, one can focus on the year over
year change, which was still up a healthy 4.4%.
Also the level of housing starts is still greater than the demographically supported level
of 170 thousand and home prices continue to increase by leaps and
bounds. Data released this week showed that in July new home prices
increased by 10.8% on a year over year basis, the largest rate of
increase since late 1989. so it seems that the housing sector still has
considerable momentum, although as witnessed with Augusts starts data,
it is prone to stumbling from time to time.” Said the TD economist.
the only significant risks to continued solid growth being external, the
International Monetary Fund said in a report released yesterday.
is "benefiting from its strong macroeconomic policy framework and the
boom in global commodity prices," the IMF observed in its semi-annual
world economic outlook." "
Seven wealthiest countries to escape the economic slowdown facing the
the International Monetary Fund."
But what if price of oil and other commodities go down? The out look for
commodity prices hinges on the depth of the U.S economic slowdown. The
TD economist gives the possibility of U.S recession a one in four
chance. The more likely scenario is a mid-cycle U.S economic slowdown.
That is forecatested to bring the commodity index down by 9% by the
middle of 2007.