How is Canada faring in our industrial diversification? Progress on trade diversification over the past 15 years is likely one of the most remarkable developments in Canadian economic history. A strong dependence on traditional markets was only enhanced by the Canada-US FTA, which saw exports to the US soar to over 85 per cent of the total. But a big shift began in the New Millennium.
After three-and-a-half years of ho-hum on this front, there is renewed interest in interest rates: where they are going, how fast, and what we need to do to be prepared, if change is indeed in the wind. A lot of the talk is related to another 'up' that scares us: inflation. Talk of rising interest rates is very good news, since it strongly suggests higher confidence in near-future growth.
International trade will be a key growth driver for the Canadian economy this year and next. However, the distribution of export growth in Canada's provinces is anything but even. Some are leading the charge, while others are steady at the national pace. Others are lagging behind, some quite seriously. What are the key factors influencing the different growth patterns?
Stable is not a word that can be used to describe much in today's economy. A notable exception is the Canadian dollar. The loonie has soared in a reasonably tight range around parity with the U.S. dollar for 3 years now. Although exporters would prefer a lower level, the stability has made activity and cash flows somewhat more predictable. Now, the loonie is losing some loft; what's happening?
Surprise of the year: World oil production is rising more than was forecast. A shock? No, that's what happens when prices spike. What is surprising is that it's occurring right in our backyard -- in the good ol' USA. The bottom line? How quickly we have gone from running out of oil to being awash in the stuff. Maybe the surprise is that we are surprised that history is merely repeating itself!