Economic Outlook For Oshawa

Transcription

1 Economic Outlook For Oshawa Derek Burleton VP & Deputy Chief Economist TD Economics May 2018

2 Global Economies Break Pattern Of Serial Disappointment Average Annual Growth %, 16Q4-17Q4 Average growth Range for trend growth Canada Eurozone U.S. Japan Source: National Statistical Agencies via Haver Analytics, TD Economics.

3 Global Outlook World economy close to full capacity Wages and inflation generally on the rise Not all economies facing the same threat of inflation: Price pressures in the U.S. most visible Not fully synchronous central bank response Fed furthest along in normalizing policy Greater caution shown by BoJ/ECB

4 Significant Risks To Growth And Inflation Geopolitical (Syria, Iran) Trade war Corporate debt Episodes of financial volatility/stress

5 Bond Yield Re-Pricing Swift, But Aligned To Fundamentals 0.8 Change From Oct. 1, U.S. 5 Year Treasury Note Canada 5 Year Benchmark Bond German 5 to 8 Years Securities Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Source: Federal Reserve Board, Bank of Canada, Deutsche Bundesbank, Bank of England, TD Economics 5

6 Financial Volatility Not A Cause For Concern At This Time Financial Stress Index Lehman Bear Stearns Euro Area Crisis 60% Probability of Recession 2018 Sell- Off % Probability of Recession 20% Probability of Recession Source: TD Economics 6

7 2.8 U.S. Repeated Fiscal Stimulus Causes Rare Large, Repeated Revisions Median Bloomberg Forecast for 2018 Real GDP Growth, % Budget = $300 bn Tax bill signed into law = $1.5 trn 2.5 President asks for tax bill on his desk by Christmas Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 Source: Bloomberg survey as of April 2018, TD Economics 7

8 Canadian Economy Downshifts As 2017 Came To A Close 3.5 Quarterly Real GDP, Year/Year % Change 3.0 Forecast 2.5 Real GDP Source: Statistics Canada, TD Economics 8

9 Ontario To Grow At Close To National Average 2.5 Real GDP, Year/Year % Change, Average National Average Atlantic Manitoba Saskatchewan Ontario Canada Quebec British Columbia Source: Statistics Canada, forecast by TD Economics as at March 2018 Alberta 9

10 Ontario's Key Indicators Mixed 8 6-month average*, Y/Y % change Canada Ontario Manufacturing Shipments Employment Retail Trade Average Home Prices Source: TD Economics, *Latest 6 months of data available compared to same period one year ago 10

11 Ranking Of Average Employment Growth Across Industries Average Employment Growth, % Change ( F) Wholesale Trade Transportation & Warehousing Scientific & Tech Services Manufacturing Educational Culture& Recreation FIRE Construction Healthcare Accomodation & Food Public Admin Primary and Utilities Retail Trade Source: Statistics Canada, forecast by TD Economics as of April

12 Ontario Government Faces A Considerable Debt Challenge % of Nominal GDP % of Nominal GDP Budget Balance (left scale) Net Debt (right scale) f 0 Source: 2017 Federal Fiscal Reference Tables and 2017/2018 Government Budgets & Fiscal Updates 12

13 Auto Sector Facing Much Uncertainty 22,000 Units (000's) Forecast Units (000's) 4,000 20,000 3,500 18,000 3,000 16,000 2,500 14,000 12,000 2,000 10,000 8,000 NA Auto Sales (lhs) Canadian Auto Production (rhs) F 1,500 1,000 Source: WardsAuto.com; Forecast by TD Economics as of December 2016

14 Oshawa's Unemployment Rate Has Fallen Below It's Long-Term Average 12 Unemployment Rate, % Average Source: Statistics Canada, TD Economics 14

15 International Migration To Remain Supportive Of Population Growth In The GTA 140,000 Net International Migration, Greater Toronto Area, Persons 120, ,000 80,000 60,000 40,000 20, Source: Statistics Canada, TD Economics 15

16 Provincial Policy Also Weighing On GTA Housing Activity 35,000 30,000 Existing Home Sales, Greater Toronto Area, Units Fair Housing Plan Announced B20 Implemented 25,000 Forecast 20,000 15, Source: CREA, forecast by TD Economics as of March

17 Balanced Market In Durham Region Existing Home Sales-to-listings ratio (12-mma) Seller's Territory GVA GTA Durham Region Balanced Market Buyer's Territory Source: CREA, TD Economics. Last data point March 2018

18 20 GTA Home Price Outlook Average Existing Home Prices, Greater Toronto Area, Year/Year % Change Forecast Source: CREA, forecast by TD Economics as of March,

19 This report is provided by TD Economics for customers of TD Bank Group. It is for information purposes only and may not be appropriate for other purposes. The report does not provide material information about the business and affairs of TD Bank Group and the members of TD Economics are not spokespersons for TD Bank Group with respect to its business and affairs. The information contained in this report has been drawn from sources believed to be reliable, but is not guaranteed to be accurate or complete. The report contains economic analysis and views, including about future economic and financial markets performance. These are based on certain assumptions and other factors, and are subject to inherent risks and uncertainties. The actual outcome may be materially different. The Toronto-Dominion Bank and its affiliates and related entities that comprise TD Bank Group are not liable for any errors or omissions in the information, analysis or views contained in this report, or for any loss or damage suffered. 19