TEC Canada is pleased to provide the monthly Andersen Economic Report exclusively to our members to offer professional updates on the current economic environment in Canada, the USA, and globally. As 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.
JUNE 2023 PREVIEW:
Canada | Declining Investments, Cautious Strategies, and Inflation Concerns
Canada’s economy initially showed robust growth in the first quarter driven by a strong January, but by March, it had stalled. A downturn is now forecasted for the second quarter and beyond, marked by reduced inventory and capital spending, cautious businesses, declining machinery orders, and lower retail sales. Depleted household savings will limit spending potential, and the Bank of Canada may consider raising interest rates if inflation persists.
United States | Job Growth Paused, Unemployment on the Rise
The U.S. economy may stagnate or experience a mild recession in the next nine months, with paused job growth and rising unemployment. Caution is advised, emphasizing cash flow and risk management. High interest rates and tighter lending standards support the recession scenario, but a brief duration and potential strong recovery in Q2 2024 are possible. The Federal Reserve is unlikely to lower interest rates prematurely, aiming for low inflation. Monetary restrictions will persist until banks repair balance sheets.
Global Economic Outlook | Slowdown Impacts Copper and Oil Prices
Copper prices have declined by 13% since late January, indicating China’s recovery is falling short and Europe’s economic slump is reducing copper demand. Weak global economic conditions and risks in the banking system are causing the Brent crude oil price to shift downward, with downside risks to oil demand extending into 2024. The U.S. Energy Information Administration (EIA) forecasts an average price of $74/b for Brent crude oil next year.
Excited to delve into the full June 2023 Andersen Economic Report? As a valued member of TEC Canada, you can access the complete report under the ‘Resources’ section of the TEC Canada App!
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