This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Canadian Economic Growth To Improve But Remain Sluggish In 2013: CIBC

Business investment waiting for global growth to spur demand for Canadian exports

TORONTO, March 4, 2013 /CNW/ - While Canada's economy limped to a close last year, it is not a sign of worse things to come in 2013 - although growth will continue to be lacklustre for some time, finds a new report from CIBC World Markets Inc.

"Any time growth slows to a crawl, one has to worry that it wouldn't take much to push the economy over the edge," says Avery Shenfeld, chief economist at CIBC. "Based on admittedly slim evidence, there are reasons to believe that Q1 growth will be better."

He points out that while employment dropped in January, hours worked are up. He also notes that auto sales look like they've rebounded - generally a signal of consumer confidence - and that the resolution of energy sector disruptions has resulted in an increase in oil exports to the United States through mid-February.

"So it looks like, in terms of quarterly GDP, Q4 could end up being the storm before the calm, with an improved pace ahead," says Mr. Shenfeld.

However, he warns that challenges domestically and globally will result in only tepid improvement. CIBC's forecast sees the economy tracking only a 1.7 per cent growth rate in 2013, a pace that will see the unemployment rate drift higher.

Mr. Shenfeld believes that the weak close to 2012 and the modest rebound ahead will keep the Bank of Canada from raising rates until third quarter of 2013, two quarters later than previously forecast. The delay in raising rates will also result in the Canadian dollar remaining below parity with the U.S. dollar until the second quarter of 2014.

"Instead of smoothly passing the growth baton from governments and households to business spending and exports, there's been a fumble," he says. "Housing has slowed, as has consumer borrowing, and governments face pressures to tighten belts. But businesses aren't opening their wallets."

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free


Chart of I:DJI
DOW 17,719.92 -78.57 -0.44%
S&P 500 2,080.41 -9.70 -0.46%
NASDAQ 5,108.6660 -18.8590 -0.37%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs