Risk Management Canada Threats and Risk

Gross Domestic Product Canada January 2016By: Paul Young, CPA, CGA

DisclaimerThis presentation is one opinion on GDP

Paul Young - Presenter

BioCPA/CGA25 years of experience in Academia, Industry and Financial solutionsYoutube Channel - https://www.youtube.com/channel/UCAArky1bAXPSuV2NLtUnyLg

AgendaSummaryCurrency RatesDetailsCommodity PricesLabor MarketRetail SalesHousing MarketCompetitiveness

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Canada GDP January 2016Wow. One word about sums up how the economy entered 2016. This is the strongest monthly growth reading since July 2013. It leaves Q1 growth tracking at 3.7%% q/q at an annualized and seasonally adjusted pace assuming flat readings in February and March in order to focus upon the effects of what we know by way of the Q4 hand-off and the January reading. The economy is in fine shape overall. It has grown for four consecutive months after a dip in September that was partly attributable to temporary production disruptions, and it has grown for six of the past seven months following very mild contractions over 2015H1. Recession this is not and not by any yardstick. he BoC will have to revise its Q1 growth reading much higher in the April 13th MPR. It had projected annualized growth of 0.8% q/q in Q1. It is unlikely to go all the way to current tracking since some pay back is possible over the duration of the quarter that could tamp down the magnitude of the pick-up and because monthly GDP figures dont always translate perfectly into quarterly readings. That said, coming in under 3% might be a challenge as that would require average monthly contractions of about 0.2% over the rest of the quarter. There was considerable breadth to the gain which supports the headline from a quality perspective versus had the print been distorted by a narrow subset of sectors. By industry, manufacturing (+1.9% m/m), utilities (+2.7% m/m), construction (+0.5% m/m), and retail (+1.5% m/m), and the mining and quarrying sector (i.e. natural resource extraction at +0.9% m/m with the energy sector up by 2% m/m) all led the way. Weak spots, and there werent many, were arts and entertainment (-1.2% m/m), wholesale trade (-0.2% m/m), management (-0.3% m/m), and everybodys favourite waste management (-0.3% m/m).

Scotia Bank5

Currency - Outlook

Scotia Bank6

Commodity Prices

BMO7

GDP by Sector

http://www.cfib-fcei.ca/english/article/8226-2016-budget-breaks-election-promise-to-small-business.html8

Manufacturing Sales

Stats Canada9

Power Generation

http://www.iea.org/media/statistics/surveys/electricity/mes.pdf10

Canada Labor Market

Stats Canada11

Job Creation

http://www.gbm.scotiabank.com/English/bns_econ/scotiaflash20160108A.pdf12

Canada Retail Sales January 2016

Retail sales rose2.1% to $44.2billion in January, led by five subsectors that rebounded from lower sales in December. Gains were reported in7of11subsectors, representing82% of total retail sales.The increase in January was indicative of higher volumes sold, as constant dollar sales rose2.1%

The largest increase in dollar terms was a4.8% advance at motor vehicle and parts dealers. This was the third gain in four months. The increase in this subsector was mainly attributable to new car dealers (+5.3%). Gains were also reported at other motor vehicle dealers (+4.0%), used car dealers (+2.2%), and automotive parts, accessories and tire stores (+1.6%).

Stats Canada13

Housing Starts

Government Policies/Taxation

http://www.ctvnews.ca/business/canada-ranks-2nd-among-10-countries-for-cost-competitiveness-kpmg-1.2837729 or https://www.competitivealternatives.com/ orhttp://www.newswire.ca/news-releases/canada-keeps-top-spot-as-most-cost-competitive-mature-market-for-business-kpmg-study-reveals-573941551.html

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Cost Competitiveness - Manufacturing

http://www2.deloitte.com/us/en/pages/manufacturing/articles/global-manufacturing-competitiveness-index.html?id=us:2el:3pr:gmci16:eng:pip:033116

Or

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Outlook for 2016 and beyondFederal Government StimulusStrong US GrowthSlower growth in China and EuropeLarger growth in areas like Africa and IndiaProductivityCapital investmentLabor productivity New taxationCarbon TaxPension Plans