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Canada's Economy 2014

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royalkingdompr | 25 Nov 2014, 04:25 PM Agree 0
Canada has experienced remarkable stability over the years since the global recession. It was one of the first countries to bounce back after the bank crisis. However, the country’s growth has remained flat in recent years, and no one appears to know what to do to spark a resurgence of economic growth. A few bright spots in the general economy are helping to keep the country feeling optimistic about the future.

Like the United States, Canada has seen much of its job growth occur in part-time positions, leaving a dearth of high-paying, full-time positions. In November of 2014, Canada’s top banker posed that the lack of certainty about the future is causing businesses to hold back plans for expansion and better jobs. However, finding a cogent policy to reassure these businesses to start their plans is uncertain. Meanwhile, mortgages remain at historically low rates in the hopes of encouraging business to gear up for the future.

Over recent years, construction in Canada has remained steady, with a growing population and new employment opportunities contributing to the increase in new construction. Low interest rates are helping to stimulate activity, with a variety of new structures. Industrial and commercial building activity has been high over the past three years. However, public sector institutional projects have been trimmed back significantly. High-end residential property is also seeing dramatic growth in some areas. In non-residential building, Canada is enjoying a surge in activity, with Ontario, Alberta and Quebec seeing the strongest performance. Going forward, non-residential construction permits are looking encouraging, with a number of projects being planned for these areas. However, New Brunswick, Labrador and Newfoundland are seeing declines in activity.

Canadian trade numbers have had an uneven run, reflecting the general shakiness of the global marketplace. Trade dipped in July, unnerving analysts who feared economic problems that have been occurring in a number of export markets around the world. By the third quarter of 2014, Canada’s trade numbers had returned to a surplus, giving the country an enviable six months of surplus out of eight. Exports had a broad base, but were decisively stronger in electronic equipment, industrial machinery, motor vehicles and parts, mineral products and consumer goods.

Real Estate
Real estate prices have been stable in Canada, and foreign investors are finding it a good place to put their money, particularly in high population areas, such as Toronto and Vancouver. Richard Crenian, founder of DeRev Properties, Ltd., notes that low interests, a lack of new taxes, school building and an interest in new construction is drawing attention from a number of foreign investors that see Canada as a favorable environment for real estate purchases. For more information, check out Richard Crenian's post on webpronews.

Canada’s energy industry is the lifeblood of the nation, and its reach covers not only crude oil production, but also hydroelectric power, natural gas, coal, uranium and wind power. Energy accounts for 27 percent of both private and public investment in the country. The United States and Canada together hold 100 years of supply at current production and consumption levels. The recent slump in oil prices has had a significant effect on the industry in Canada. However, merger and acquisition activity within the energy sector is experiencing a dramatic increase, indicating that consolidation is being used to improve the industry’s prospects in the near future.

Small Business Growth
In Canada, small business growth outpaced other sectors of the economy in the first stages of the recovery. The number of companies with 20-49 employees has grown 18 percent since the worst days of the recession. Companies with 10 to 19 employees grew 12.5 percent, and those with 10 or fewer employees grew at 10.3 percent. However, small business growth has recently slowed, lagging behind the rest of the economy. A turnaround is expected over the next five years, especially in growing areas of the country like Alberta and British Columbia.

Future Outlook
Canada’s future looks bright on a number of fronts. Recovery in the general global economy will ensure that their export numbers remain strong. Stronger economic conditions in the United States will help to boost sales of autos and other consumer goods. The change in the make-up of the U.S. Congress may mean approval of the Keystone XL Pipeline, which will boost Canada’s energy production. Foreign investment is expected to increase in coming years. As job growth continues, Canada will be in a position to increase its GDP significantly.

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