Be prepared for a long grind down.
Canada’s economic growth, weighed down by high interest rates and inflation, is expected to settle at around 1% this year, but stall in 2024 as these effects continue to weigh on the economy.
The entire country is struggling under these circumstances, but some states are faring worse than others.
British Columbia has had a tough year. RBC economists lowered their full-year forecast to 0.5% from 0.6% as historically severe wildfires and strikes at the state’s 30 ports rocked the economy.
But in a province with Canada’s most expensive real estate and associated high debt levels, much of the slowdown will come from consumers and businesses cutting back on spending.
“Rising interest rates are hitting British Columbians particularly hard given rising debt levels,” said the RBC team led by chief economist Craig Wright. “This pressure is likely to continue until 2024, with growth remaining on a moderate trajectory.”
B.C.’s population growth is at a 40-year high, boosting retail sales. However, per capita sales he decreased by 2.4%.
Construction employment has fallen 17% since January, so the employment rate is up a full point this year. Construction investment fell by 12%.
Then there’s Quebec, the second province to rank at the bottom of Canada’s growth projections.
Economists say Quebec has not received as much of a boost from population growth as other regions, and the economy has “lost significant momentum.”
Wildfires also hit the region, forcing many mines to close. Construction has been halted and manufacturing has stopped.
“We expect the state to continue walking a fine line between positive and negative growth for the remainder of this year and into 2024,” RBC said, with growth expected to be 0.5% this year and 0.4% next year. is expected.
Consumers are beginning to feel the pressure of a weakening job market and rising costs of living, and those pressures are evident in the housing market.
Investment in housing construction fell by 31% in the first half of this year, and housing starts fell by 40%.
Now let’s compare these provinces to Alberta. Alberta is expected to lead Canada’s economic growth this year.
The country’s highest population growth rate and rising oil prices both contribute to the country’s resilience. Not only are oil prices high (WTI was $90 this morning), but the oil and gas industry is also increasing investment.
In summary, “high oil prices are supporting local incomes, real estate is holding up well to rising interest rates, and people are moving to the state in droves,” say BMO economists Robert Kavcic and Sherry Kaushik. writing.
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Investors exited the stock market last week at the fastest pace since December, according to BofA investment strategists. According to Michael Hartnett and his team’s weekly Flow Show, US stocks topped the list with US$16.9 billion in outflows in the week ending September 20th.
They said that a longer term would lead to higher interest rates, increasing the risk of a hard landing and a stock market “crash” in 2024.
Hartnett said the signs of a hard landing are already in place, including a steepening yield curve, rising unemployment and personal savings rates, and an increase in credit delinquencies and defaults.
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What would you do if you knew when you were going to die and how much money you would be left with?
The simple answer is “nothing.” Alan Norman, a certified financial planner, says that by thinking like this, you can live a balanced life and avoid the risk of having too much money or dying from not enough money. He said it would put him in a much better position. But the problem is that most of us don’t know how long our health will last.learn more
Today’s Posthaste was written by Pamela Heaven. @pamheavenIncludes additional reporting from , Canadian Press, Thomson Reuters and Bloomberg.
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