As we close out a historical first quarter in 2020, we see the economic and financial data that illustrates the economic impacts of measures to mitigate the spread of Covid-19. Our partners at the National Bank Economics team offer a detailed review of many of these indicators in their recent April report.
Declining Oil Exports Will Slow Canada’s Covid Recovery
A recent economic forecast from RSM Canada sees Canada’s corona virus recovery evolving at a more modest pace than the U.S. In a recent article in Investment Executive Canada, RSM projects a ‘V’ shaped U.S. decline and bounce back as Canada is slower with a ‘U’ shaped, softer landing and slower climb out of recession. The difference is due to Canada’s export reliance, particularly in the oil and gas sector, which is also expected to decline significantly as a result of Covid-19. RSM argues that more fiscal stimulus is required as Canada’s current package amounts to 3% of GDP as the U.S. has offered 10% of GDP to date.
Residential Housing Market Will Be Impacted
Not surprisingly, according to the Canadian Real Estate Association (CREA), seasonally adjusted home sales fell 14.3% from February to March. The decline was broad based, with decreases reported in all 26 of the major markets surveyed. A National Post article echos the predictable change in what was a very robust real estate market.
Hampton Securities Advisors continue to keep you up-to-date and informed as we evolve through these challenging times. If you have any questions or concerns please feel free to contact us.