Tag Archives: sustainable recovery
Stephen Dupuis, Toronto Sun
Last week, I let readers in on the highlights of the inaugural address of the newly elected president of the Canadian Home Builders’ Association, Victor Fiume, of Durham Custom Homes.
BILD wishes Fiume well as he takes over the reins from Gary Friend, a Vancouver builder who led his industry at the national level with great distinction throughout one of the most challenging years ever faced by a CHBA president given the global economic crisis that dominated Friend’s tenure.
Fiume’s speech was given in Victoria, B.C., where spring was about a month ahead of schedule with the trees blossoming, the flowers pushing up and the grass green and growing.
As if picking up on the optimism that always comes with spring, the economic presentations we heard were quite encouraging. As Dr. Peter Andersen, consulting economist to the CHBA told builders, “fears of a double-dip recession have been put on the back-burner and it looks like we’re in for a sustainable recovery.”
Andersen declared that the recession ended in August, 2009, described 2010 as a “transition year” and said the true recovery would kick-in next year with 4-5% growth.
Unfortunately that economic growth rate will bring with it rising rates but that’s next year — for the balance of this year, Andersen sees rates as being on hold. Holding at the lowest levels in 50 years is a very good thing.
Further to the rosy forecast, Andersen noted that part-time employment is up adding that employers typically bring on part-timers as a prelude to hiring full-time.
Commenting on house prices, Andersen stated that he sees no sign of runaway prices and wondered out loud why all the fuss. “I don’t buy the bubble theory,” he stated. “Prices are just getting back to where they were before the economic crisis,” he added. Andersen also offered a very interesting perspective on the renovation market.
Where the conventional wisdom says that market may go down due to all the activity brought forward by the Home Renovation Tax Credit, he thinks that activity just primed the pump and now that homeowners have caught the renovation bug, they will just move onto the next project. Sounds plausible to me.
The good news is that Ontario builders were part of a British Columbia/Ontario sweep of the recent Canadian Home Builders’ Association Sales & Marketing (SAM) awards.
The bad news is that of the eight awards taken by Ontario builders, only two winners hailed from the GTA, but they are both deserving of a shout-out, so hats off to Empire Communities who got the award for Best Brochure/Kit for Fly Condos, besting builders from Victoria, Calgary, Ottawa and Hamilton.
A big tip of the hat to Bachly Construction of Bolton, Ont. who captured the award for Best Single Detached Home (over 4,000 sq. ft.) against heavy competition from Vancouver, Kamloops and Delta, B.C., as well as a place called Quispamiss, N.B.
The Bachly house is well worth checking out at www.bachly.com (click on featured home). Last but not least, BILD congratulates former local president Joe Valela of Valemont Homes on his election to the CHBA Executive Board, and Mike Cochren of Oakville-based Cochren Homes (and a RenoMark contractor) on his appointment to that board.
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Economy likely resumed growing this quarter, but Carney, Flaherty say climb out of financial crisis hole will be slow
Kevin Carmichael – Globe and Mail
Canada appears to be breaking free from the downward pull of the U.S. recession, surprising many economists by creating jobs in August even as the American unemployment rate jumped to the highest since 1983.
Private employers in Canada, led by retailers, financial firms and real estate agencies, hired more people than they fired for the first time since September, 2008, resulting in a net increase of 27,100 positions in the month, compared with a net decrease of 44,500 in July. Canada’s unemployment rate rose a 10th of a percentage point to 8.7% – still the highest since January, 1998 – as the number of people looking for work increased faster than the number of new positions, Statistics Canada reported Friday.
The Canadian figures are a stark contrast to a report by the U.S. government that showed that Canada’s largest trading partner shed another 216,000 workers last month. That pushes the number of jobs lost since that country’s recession began in December, 2007, to 6.9 million, the most in any downturn since the Second World War. The U.S. unemployment rate rose to 9.7%, and the Obama administration continues to brace for a jobless rate of as much as 10%.
Marc Appleby, president of Ottawa-based Earth Innovations Inc., which sells a volcanic mineral as an environmentally kinder traction agent than salt and gravel, said he’s about to move his office out of his home and add three people to his staff of four to keep up with a tripling of sales. The business is almost entirely Canadian.
Still, few predicted a gain in jobs in Canada. Most on Bay Street were expecting a decline in Canadian hiring of about 15,000, according to the median estimate of 17 analysts polled by Bloomberg News.
The Canadian dollar jumped the most since July, climbing almost 2% to 92 U.S. cents, and the S&P/TSX composite index rose 95.98 points to 11,017.47, according to Bloomberg. In New York, the Standard & Poor’s 500 index increased more than 1%, as some investors chose a positive interpretation of the U.S. labour numbers because the pace of decline eased from the 276,000 jobs lost in July.
The Bank of Canada said last month the country’s economy likely resumed growing this quarter thanks to extraordinary government stimulus that has supported consumer spending. Still, Governor Mark Carney and Finance Minister Jim Flaherty say the climb out of the hole created by the financial crisis will be slow, in part because labour markets in Canada and around the world – especially the U.S. – remain weak, damping consumer demand.
“The key ingredient for a sustainable recovery is still absent,” Tony Crescenzi, a market strategist and portfolio manager at Pacific Investment Management Co., which controls the world’s biggest bond fund, said yesterday in an interview on Bloomberg Radio. “We need income growth to produce self-reinforcing expansion.”
Jobs data can be volatile, so economists resisted using the latest figures to declare a definitive end to the hard times in Canada. But the trend clearly shows that the destruction in the labour market is at least easing.
“I understand that people will say most gains are part-time, but at a turning point in the cycle I will take that any time,” said Stéfane Marion at National Bank Financial in Montreal, one of the few Canadian economists to predict the economy would add jobs in August. “The economy is clearly on track to grow again.”
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