Location; Location; Location! That was the message Dr. Peter Andersen had for the crowd at Castle’s Annual General Meeting earlier this year in March. Dr. Andersen, a regular speaker at the event, shared his insights on the global economy and his forecast for 2016. Specializing in economic conditions and outlook, his objective was to act as a filter, separating the signals from the noise and to deliver useful information to help the gathered group of entrepreneurs, retailers, and manufacturing executives, plan accordingly for the upcoming year.
This year his analysis was simple: economic climates are dependent on where you live. For example, with oil prices staying below US$50 per barrel, there will be a negative impact on Alberta with continued weak consumer confidence and a pronounced slump in low-rise and high-rise new construction.
Overall, he pointed out that employment numbers are still the best economic indicator for Canada and that there is no recession expected in the United States; which is continuing to experience an expanding economy. He also expects the Canadian dollar to gain strength. What does this mean for Canada? Growth for our allies down south means a positive impact on economic conditions of various regions, especially for the provinces of Quebec, Ontario and British Columbia. Continued strength in single-detached construction will be evident in Ontario and British Columbia and will pave the way for elevated low-rise construction in the cities of Toronto, Victoria and Vancouver. In Atlantic Canada, Newfoundland remains very weak when it comes to housing starts, while Nova Scotia saw a large increase, largely in Halifax.
As diverging regional paths persist, housing affordability trends will continue to run in opposite directions in Canada. Some regions will experience market erosion, where rapid price increases further exacerbate already poor affordability conditions, especially in the single-detached segments, whereas trends in other local markets will remain generally constructive, with affordability levels either improving or staying fairly stable. As these fluctuate substantially across the country, the true economic forecast will all depend on where you live.
About Dr. Peter Andersen
Dr. Andersen founded Andersen Economic Research in 1984 and has provided economic forecasts to large and small companies for over 30 years. In his spare time, he has taught financial economics and money & banking at the University of Texas at Austin where he received