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.
Looking for an audio summary? TEC Chair Paul Martin highlights Dr. Andersen’s primary findings, including what key indicators the esteemed economist is watching closely.
- The tight housing market and the affordability squeeze are expected to support renovation spending this year. Hardware and building supply retailers should expect to stay busy.
- The Canadian economy is still doing well. Total economic output increased strongly in early 2022. Transportation and warehousing activity shows strong gains, the March unemployment rate (5.3% seasonally adjusted) is the lowest since comparable data became available in 1976 and employment returned to its pre-pandemic level last September.
- The yield curve will be important to watch. An increase in short-term rates above long-term rates would be a recession warning. We are not there yet; at this point, the 2-yr U.S. Treasury rate is 2.71% and the 10-yr is 2.90%.
- Looking ahead through the 2nd Quarter, economic growth is expected to reappear as some of the factors that were a 1st Quarter drag will be reversed. Oil and gas production is now picking up, increased agriculture production will provide an economic boost and housing construction will continue to contribute to growth.
- The World Bank estimates that the food price shock will last at least 3 years. As a result, food producing countries such as the United States, Canada and Australia will experience a boost to their agricultural sectors despite higher fertilizer costs.
- Global indebtedness and equity valuations are high. Indebted emerging market economies are vulnerable to currency pressure and tight credit. In such an environment, with a serious global recession possible in 2023, the outlook for commodity markets is complicated.
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