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Blog by Steve Burk

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Canada may escape economic slowdown...

 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.
   Canada's economy robust, IMF says: Canada's economy remains robust with
   the only significant risks to continued solid growth being external, the
   International Monetary Fund said in a report released yesterday. Canada
   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." "Canada will be the only one of the Group of
   Seven wealthiest countries to escape the economic slowdown facing the
   U.S. and EU, thanks largely to its exports of oil and natural gas, says
   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.