From Recession to Recovery

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1 From Recession to Recovery Warren Jestin SVP & Chief Economist Presentation to: Edmonton Real Estate Forum May 4, 21

2 The Global Economy Is Reviving Real GDP f 211f annual % change -8 China India Brazil U.S. Canada Euro zone U.K. Japan

3 The Rebound in Production is Boosting Commodity Prices... Industrial Production 25 y/y % change Oil & Natural Gas 6 prices, index:22 Q1=1 Oil China* Natural Gas 5 3 United States *3-month moving average.

4 ... & Bolstering Canadian Export Earnings Commodities Drive Canadian Exports % share of total export receipts, 29 Export Growth 4 Index: 22Q1=1 35 Other Mfg 42% Other Vehicles & Commodities Parts 11% Energy 27% 2% Energy Total Commodities 47% 5 Vehicles & Parts

5 U.S. Housing Faces a Long Road to Recovery Housing Starts & Inventories Rising U.S. Foreclosures 15 months supply Housing Starts (RHS) mn units % of total loans Subprime Foreclosures 4 3 Inventories (LHS).8 2 Prime Foreclosures Source: Bloomberg.

6 Big Structural Adjustments Are Reshaping Manufacturing Motor Vehicle Sales* Construction & Services Lead in Canada 24 millions of units Western Europe and Japan 15 employment, Index: 22Q1= North America Construction Services China Manufacturing * Includes cars and trucks.

7 Central Banks Will Provide Less Stimulus in 21 & Global Inflation Q4/Q4 % change 6 Central Bank Rates % 5 forecast 5 U.S. 4 Canada U.S. 4 Canada forecast

8 Look For a Strong Loonie But Volatile Exchange Markets Canadian Dollar Strength 1.1 CAD/USD WTI Oil US$/bbl Canadian Dollar forecast year CAD/USD Average ( ) Oil

9 Big-Ticket Sales Have Held Up Better in Canada 125 Housing Starts index: 22=1 Canada forecast 12 Motor Vehicle Sales index: 22=1 forecast 1 1 U.S U.S. 8 Canada Housing Starts - Provincial index: 22=1 B.C. Alberta Ontario Motor Vehicle Sales - Provincial index: 22=1 Alberta B.C. Ontario

10 Non-res Construction Also More Resilient in Canada 145 Non-Residential Construction index: 22=1 forecast 18 Non-Residential Construction* index: 22=1 Canada U.S. 16 Alberta B.C. 12 Ontario *Provincial figures do not include engineering construction, pipelines or drilling activity.

11 Growth Prospects Best in Resource-Rich Provinces 6. real GDP, annual % change e 21f 211f Nfld & Labrador Saskatchewan B.C. Alberta Ontario Manitoba Quebec Maritime Provinces

12 Big Demographic Challenges Loom on Horizon 51 Median Age of Population (years) Japan Europe Canada U.S. China Brazil Mexico India Source: IMF.

13 Environmental Opportunities and Costs GHG Emissions Hydroelectric Power Generation 7,5 Mt of C 2 e Mt of C 2 e 75 1 % share of generation, 29 Canada, RHS 7, 7 8 U.S., LHS 6, , 6 4 5,5 EU-27, LHS , BC AB SK MB ON QC NB NS NL* Source: U.S. Environmental Protection Agency, Environment Canada, European Environment Agency. *Major hydroelectric power exports from Labrador to Quebec. Source: Environment Canada.

14 Disclaimer This report has been prepared by Scotia Economics as a resource for the clients of Scotiabank and Scotia Capital. Opinions, estimates and projections contained herein are our own as of the date hereof and are subject to change without notice. The information and opinions contained herein have been compiled or arrived at from sources believed reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness. Neither Scotiabank Group nor its affiliates accepts any liability whatsoever for any loss arising from any use of this report or its contents.

New World Realities. Warren Jestin SVP & Chief Economist. Edmonton Real Estate Forum. Edmonton, May 3, Presentation to:

New World Realities. Warren Jestin SVP & Chief Economist. Edmonton Real Estate Forum. Edmonton, May 3, Presentation to: New World Realities Warren Jestin SVP & Chief Economist Presentation to: Edmonton Real Estate Forum Edmonton, May 3, 211 The Global Economy Is Reviving Real GDP 12 1 annual % change 2-7 21e 211f 212f 8