The pulse of the Canadian economy is beating faster than expected, with GDP growth surpassing Bank of Canada projections. Despite this positive development, there are still some looming concerns about the overall health of the economy.
Here’s a breakdown of this week’s top stories in Canadian real estate and the economy:
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Canadian Real Estate
- Canadian GDP outperformed BoC expectations, with Q4 data showing stronger growth than anticipated.
- Upward revisions of Q2 and Q3 GDP figures suggest that the economy is in better shape than previously thought.
- However, questions remain about discrepancies between this growth and key indicators like unemployment and insolvencies.
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Bank of Canada Outlook
- RBC predicts that interest rates will remain steady in the near future due to the stronger-than-expected economy.
- With inflation risks on the rise, the BoC is expected to proceed cautiously in its next meeting.
- Any implementation of tariffs could prompt immediate easing measures from the central bank, but if risks do not materialize, additional easing may not be necessary.
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Job Market
- Canadians are grappling with one of the most challenging job markets in recent years, as job vacancies plummet to a 7-year low.
- Just two years ago, the job market looked very different, with more job opportunities than unemployed individuals.
- Currently, there is only one job available for every three actively seeking unemployed individuals.
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Business Growth
- Canadian business growth is stagnating, with Statistics Canada reporting a decrease in active businesses.
- This trend of businesses closing at a faster rate than new ones opening has resulted in the lowest business growth rate since 2021.
- The slowdown in business growth, amidst significant population increases, is concerning and reminiscent of the country’s previous economic downturns.
- Toronto and Vancouver Real Estate
- While Canadian real estate has shown some signs of improvement, the markets in Toronto and Vancouver are lagging behind.
- The sales to new listings ratio indicates a lackluster demand in these two major real estate markets, positioning them as oversupplied and low in demand.
In conclusion, the Canadian economy’s recent performance is a mixed bag of positive growth and concerning stagnation. As the nation navigates through these challenging economic times, it is crucial for policymakers and businesses to remain vigilant and proactive in addressing the underlying issues affecting growth and stability.
