TEC Canada is pleased to provide the Andersen Monthly Economic Report exclusively to our members. The former assistant chief of the Bank of Canada’s research department, Dr. Peter Andersen provides valuable economic insight to help you make better business decisions.

Canada:

• Canada’s economy is doing much better than the United States. However, it is bound to follow the U.S. into an economic slowdown after mid-year. If the U.S. economy experiences an outright contraction in 2023, there will undoubtedly be one in Canada as well.
• Despite the surprise in May’s housing starts, both new and existing home sales are declining, and inventory levels are rising, signaling that housing prices have peaked. This is bad news for renovation spending.

U.S.:

• Expect the annual read GDP to decline 1.0% in 2023 – prior to the 2020 pandemic downturn, the largest annual decline was in 2009 (3.5%). Some sectors though, such as energy and agriculture, could be expected to grow, leading to regional and sectoral variations.
• There won’t be a housing crash as long as the job market holds up. However, inevitably, there will be an increase in layoffs over the next 12-18 months, though there are predictions that companies will make it a priority to retain experienced staff.

International:

• Copper is a key indicator for commodity prices. It held relatively steady at $4.70 until mid-April but has plummeted to $3.80. It’s sending a message: there’s weakness in the world economy, weakness in China and weakness in the U.S. housing market.
• The prospect for a long war in Ukraine points to serious shortages of fertilizer, wheat and other farm products such as soybeans, sunflower oil, corn, canola – this will directly and indirectly affect food prices. An extended war also points to continuing upward pressure on oil and natural gas prices.

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