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It’s ‘Bragging Rights Day’ in Canada

A preview of Canada and U.S. GDP numbers


 

North American Beaver/Chuck Szmurlo

What happens on July 31, you ask? Well, this upcoming July 31 both Canada and the U.S. will be releasing GDP estimates, and — you guessed it — ours are supposed to be better.

I should specify that by “better” I mean that Canada’s numbers are likely to surprise on the upside, whereas the U.S. will likely disappoint. I should add another asterisk: Ours are monthly GDP figures, whereas the U.S. will be reporting on the three-month period from April to June that makes up the second quarter. Apples and oranges, you say? Well, our apples are still better than their oranges. As the recovery down south gains momentum, our bragging days are numbered. So enjoy this last remnant of our glorious spell as a global economic champion and don’t worry about the fine print.

Here’s an overview of what economists expect:

Canada – May GDP:

Who thought May would turn out so well? Analysts are revising up their forecasts and the Bank of Canada might soon have to follow suit. The expectation is for a gain of 0.3-0.5 per cent of GDP, which would mean the economy is on track to beat the BOC’s tame projection of one per cent growth in the second quarter. This would be highly unusual since, as my colleague Tamsin McMahon recently pointed out, the bank is usually overly optimistic.

Before you get carried away with euphoria, though, I should note that the surprise performance seems to be largely a confluence of one-off lucky circumstances. Fertilizer sales got an unexpected boost from pent-up global demand due to a late planting season caused by an unusually wet and cold Spring. Retail sales, likewise, soared as Canadians celebrated the end of this long, crappy Spring spell with a bit of extra spending. The weather must also have something to do with a recent rebound in the number of houses being built after a grim winter. And finally – the most random seasonal twist of all — there was the impact of the NHL lockout, which ensured hockey season was still ongoing in May.

Savour the propitious confluence of freak events while it lasts, for June is poised to look like the exact opposite of May, due to the impact of the Alberta floods and Quebec’s construction strike.

U.S. – second quarter GDP (advance estimate):

Nobody predicted great things for the second quarter after Washington raised income taxes on the rich, as well as payroll taxes on everybody, and slashed federal spending through the sequester. Still, the economy might have missed even those tempered expectations. Americans pushed the stop button (or, at least, the pause button) on their recent shopping binge: Consumer spending is projected at 1.4% for the quarter, more than one percentage point lower than in the January-to-March period, according to CIBC. Exports continue to linger, as Europe and emerging economies struggle. Even the housing market seemed to sputter a bit toward the end of the quarter, with both the pace of residential real estate construction and sales of existing homes slipping in June.

Wednesday’s figures will reflect an 80-year statistical revision by the U.S. Commerce Department that should boost GDP levels by three per cent. The bump-up, though, shouldn’t affect growth rates.


 

It’s ‘Bragging Rights Day’ in Canada

  1. Their recovery will drag us up with it… so no problems.

    • They aren’t going to recover. Find another coat tail to cling to.

      • GoBama!

        • Obama isn’t the problem. Congress and American ideology are.

      • We’re attached to this one, Emily, be it to your taste or not.

        • We used to be attached to the UK too….then we weren’t.

          Get over your love affair with the US.

          • Well, you can imagine economic interrelations as ‘love affairs’ if you wish, and masturbate over them in the privacy (hopefully) of your own home, but please leave me out of those fantasies.

            I realize I can do nothing concrete about it should you choose to include me in your erotic notions, of course.

          • Now that you’ve danced all around the mulberry bush try discussing economics like a grown-up.

            The US is slowly crashing….has been doing so for some years….it’s never going to be ‘it’s old self’ again…..so why tie us down to a sinking ship….when we have other options and possibilities?

            Only lazy unambitious Canadians would wait to be ‘pulled up’ by the US anyway.

          • I don’t think you understand what it is that ties us so closely to the economy of the US.

            It’s not a political choice, it’s not a philosophical direction, it’s the reality of having a huge market at our doorstep, across a border that is much longer east-west than either country is north-south.

            Obviously we ought to work on liberalizing trade world wide, and we’re doing that through negotiations with the EU, the ASEAN countries, Mexico and South America. But in no sense would we ever be better off putting trade barricades between us and the US.

          • Well we managed just fine when we mostly traded with the UK….long before the 21st century and modern communications and transportation.

            It’s now a global world….so China is just as close as the US

            Canada has been lazy, and dependent on the US long enough

          • We traded with the UK artificially, in a world that was divided up by trade empires with rigid barriers between them.

            We just happened to be in the same empire.

            Now we trade more and more based on natural circumstances, like for example the fact that China really is a lot farther away than the US. (I suggest you look at a globe)

          • Yup, and we did it all the same….we still trade with them you know, we just don’t use wooden ships and sails. LOL

            And huge trade blocks have formed around the world….the more of them we can trade with, and be a part of, the better off we’ll be.

            Eventually we’ll all trade together, and blocks will be history

            Most of the stuff in your home comes from China….today it’s right around the corner.

            We should never have put all our eggs in one basket….and yet here you are wanting to cling to the basket….even with all those smashed eggs in it

          • I don’t think you realize that we haven’t put any eggs anywhere.

            The massive amount of trade we do with the US is because they’re right there, on our doorstep.

            Transport costs to the US are minuscule compared to transport anywhere else in the world, and even compared to transport across Canada.

            What I want or don’t want doesn’t enter into it; they are and will remain by far our most important trading partner no matter what else we do.

          • Yes, at one time over 90% of our trade i believe was done with the US.

            Which was great fun when they were booming….disasterous when they’re going downhill.

            If they crash, we crash by being pulled down with them

            Canada has been warned about this for eons.

            So we divvy up the trade…..not one big basket stamped USA, but lots of baskets stamped with the names of all the other nations and trading blocks.

            We have since lowered our trade with the US% and do it elsewhere…..we need to do far more divvying though.

            Geographic location has never mattered in the world….it matters even less today

            So in spite of your pronouncements….we aren’t doomed by being stuck in a rut. Grit your teeth and get used to it.

          • (sigh) still can’t see the simple truths, can you?

          • I know you think you came down from the mountain carrying the truth in the form of tablets…..but today a tablet is something quite different. So update your thinking

            “It’s not the strongest of the species which survive, nor the most intelligent, but the ones most responsive to change”
            Charles Darwin

          • I’ll try again.

            We do not ‘divvy up trade’, deciding from on high that Canada will trade ‘X’ amount, and then further decide where that trading will take place.

            We as Canadians trade everywhere and anywhere that trade can be made profitable.

            The role of our government is to expand the possibilities, and increase the number of places where we can trade successfully.

            The only reason our trade with the US is a lower percentage than at times in the past is that we have managed to open up more areas where we could trade.

            But transport costs are with us always, and the US will remain the best place for us to trade for the forseeable future. And if that’s not the best place, if we cannot profit as much, then more of our trade will be elsewhere… but without any ‘divvying’ by anyone.

          • ???? Where have YOU been?

            We have trade stats, and lists of the countries we trade with, and precisely what we trade, and how. It isn’t a free-for-all.

            And we don’t trade anywhere we like….trade agreements have to be in place. It’s all highly regulated

            Do stop going on about transport costs…..it’s ofen cheaper to build something overseas and ship it here, than it is to build it here.

          • The US needs the electricity, oil and other commodities they get from Canada. We are their cheapest and most reliable supplier. Therefore a lot of our trade with the US is a lock.

            However for Canada they are not always the best buyer.

            Americans being the larger market don’t always trade fairly.

            We would do better trading with Asia and even Europe if they want to play fair.

  2. This column is ridiculous. Our GDP is forecast to come in at 1.7% this year. That is totally pathetic compared to the last 60 years of GDP.

    It’s time Maclean’s got some competent economists on staff. These neo-con ideologues are making a joke of the publication.

  3. From a reliable source on economics:

    “A sharp drop in oil sands output held the Canadian economy to slower-than-expected monthly growth of 0.2 per cent in May.

    Economists had been expecting 0.3 per cent growth.”

    Canada’s economy held back by drop in oil sands output

    http://www.theglobeandmail.com/report-on-business/economy/canadas-economy-grows-for-fifth-month-in-a-row/article13523267/

    Yet the neo-con economists at Maclean’s want Canada to go all in on tarsands development. Disgusting.

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