Chief financial officers at Canada’s corporations see a 42 per cent chance, on average, that Canada will fall back into recession by the end of this year, according to a new survey.
The CFO Global Business Outlook from Duke University found execs believe a Canadian recession is more likely than a U.S. one. Respondents gave the U.S. a 31-per-cent chance of a recession by year’s end.
As recently as last June, the survey estimated the U.S. had only a 16-per-cent chance of recession.
"Last June, the odds of recession were low in many countries, including the U.S., Canada and much of Europe,” said John Graham, a finance professor at Duke’s Fuqua School of Business.
“Today, driven in large part by slowing emerging economies and volatile financial markets and commodity prices, the risk is relatively high around the world."
The polled executives named China's slowdown the largest risk to the global economy, with 59 per cent of respondents calling it a risk.
Other top risks included political turmoil in the U.S. primary season (53 per cent), a stock market decline (50 per cent) and the collapse in oil prices (40 per cent).
Canada fell briefly into a "technical recession" last year, in the wake of a precipitous drop in oil prices.
Energy-exporting regions like Alberta, Saskatchewan and Newfoundland remain mired in recession, but lower energy prices have put more money in consumers’ pockets in other parts of the country.
"Driven in large part by slowing emerging economies and volatile financial markets and commodity prices, the risk is relatively high around the world."
Ontario and British Columbia, in particular, have seen their economies jump-started in the past year, with both provinces registering above-average employment growth.
Most forecasts today call for Canada’s economy to grow in the 1.5-per-cent range this year. The latest data from StatsCan, released last week, showed the country’s economy grew more than expected in the final quarter of 2015, expanding by 0.8 per cent.
But Canada’s economy ended up expanding by just 1.2 per cent for all of 2015, the slowest pace of growth the country has seen since the financial crisis nearly a decade ago.