EDC Weekly Commentary by Peter G. Hall

Western Europe: Leader or Laggard? - July 15, 2009

Wed, 15 July 2009 17:00:00 EST

A year ago, Europe was being touted as the resilient zone. Inflation was the big worry, not recession. Interest rates were hiked 25 basis points on July 9th, 2008. But the zone’s analysts were wrong. Along with the rest of the world, Europe tumbled. Brighter signs have emerged recently, enough to prompt calls for a scaling-back of government stimulus. Is Europe poised to lead the world back to growth?

In the Valley - July 8, 2009

Wed, 08 July 2009 17:00:00 EST

Like it or not, that’s where the world economy is at present. Six months of freefall down a pretty sheer cliff, and everyone’s still a bit dazed, wondering if this is a V-, a U- or an unusually W-shaped valley. Spirits rose when the freefall ended, but that seems to be giving way to the realization that the trek out of the valley will be prolonged and hazardous. What is the near-term outlook for the economy?

Dazed by the Dollar - July 1, 2009

Wed, 01 July 2009 17:00:00 EST

What’s gotten into the loonie? Months of calm were shattered in late April as the dollar soared by 12 cents in 29 days. The swift increase would be shocking at the best of times, but this run-up is hitting exporters during the worst economic episode they have likely ever seen. What’s going on?

Upsurge in Unemployment, June 24, 2009

Wed, 24 June 2009 17:00:00 EST

For economy-watchers, a new month brings a rush of the latest employment figures. It hasn’t been a particularly pleasant point in the calendar lately, and there’s a lot of concern about what next month’s release will hold. With the deluge of job losses we have seen to date, is the worst now behind us?

Exporters’ Abject Pessimism Fades - June 17, 2009

Wed, 17 June 2009 17:00:00 EST

Last fall’s crisis of confidence sent worldwide gauges of business and consumer sentiment reeling. A growing sense that the global economy is no longer in freefall has recently increased the feel-good factor. Canadian exporters concur: the abject pessimism recorded six months ago has faded, with the Spring 2009 Trade Confidence Index posting its largest one-period gain since the post-9/11 surge.

Scuppered Projects Resurfacing - June 10, 2009

Wed, 10 June 2009 17:00:00 EST

Booming commodity prices led to announcements of sizable mineral investment projects in recent years. The commodity bust saw many immediate project cancellations. Rapid evaporation of billions of dollars of anticipated spending likely contributed to the economic downturn, and to the alarming drop in business confidence. But are all of the scuppered projects on indefinite hold?

Globalization Dented, not Derailed - June 03, 2009

Wed, 03 June 2009 17:00:00 EST

Globalization always rubs some people the wrong way, but this is especially the case during recessions. This one is worse than usual, because many blame globalization for the contagion that brought the U.S. financial crisis and economic downturn to their shores.

No Industry Exempt from Global Downdraft - May 27, 2009

Wed, 27 May 2009 17:00:00 EST

Canadian exporters have faced significant new-millennium challenges. The irrepressible loonie, increased global competition, a thickening border with our top customer, bottlenecks in trade infrastructure – any one of these would have been challenge enough. Even so, exporters have managed to grow their business and create key success stories, thanks to vibrant global demand. With that key element now gone, export sales have suddenly become tough for all industries.

Andean Region Holds Promise - May 20, 2009

Wed, 20 May 2009 17:00:00 EST

When it comes to Canadian exports, the Andean region – Bolivia, Colombia, Ecuador, Peru and Venezuela – is not likely top-of-mind. But Canadian exporters and investors have been very active in the region in recent years, and there is much potential for growth well into the future.

Recession a Window of Opportunity for India - May 13, 2009

Wed, 13 May 2009 17:00:00 EST

In the economic heyday of the past few years, India was a paragon of prosperity in the new era of globalisation. India’s long-term potential was even thought by many to be greater than China’s. But global recession has muffled a lot of that talk. Have recent events changed India’s outlook?

Western Canada: the Bigger the Bubble… - May 06, 2009

Wed, 06 May 2009 17:00:00 EST

Primary producers were ‘king of the hill’ in the boom years. Global demand seemed insatiable, market prices soared, financial capital was plenteous and ambitious projects were almost without number. Western Canada flourished in the heyday; now that it’s over, how will the West fare?

Restoring Balance - April 29, 2009

Wed, 29 April 2009 17:00:00 EST

History-making. That’s likely how the current economy will be sized up when the books are written. There are few episodes in the post-war period where market drama has been as intense. And with forecasts in freefall, getting a proper fix on the economic fallout is a huge challenge.

Is China Reviving? - April 22, 2009

Wed, 22 April 2009 17:00:00 EST

Recent signals from the Chinese economy have been mixed. Troubling developments in the second half of 2008 sparked fears of further fallout. But these have given way to a bevy of upbeat data in recent weeks, and with it, a more optimistic tone. Is China on the mend?

Clues from the US Leading Indicator - April 15, 2009

Wed, 15 April 2009 17:00:00 EST

'Up' has crept back into US economy-talk in recent days. A quick rally in equity markets, modest commodity-price gains and what seems like a bottoming-out of certain key US economic signals have together fuelled hopes of impending rebound. But what are the leading indicators saying?

Good News Beyond the First Quarter? - April 8, 2009

Wed, 8 April 2009 17:00:00 EST

Decoupling was a popular term a year ago, used to describe how the rest of the world had unhitched from the US economic problem. It is now rich fodder for late-show humour. The acutely synchronized recoil that output saw in late 2008 has erased decoupling from the vernacular, and sent global forecasts tumbling. To make matters worse, this is no one-quarter wonder.

The Poison of Protectionism - April 1, 2009

Wed, 1 April 2009 17:00:00 EST

“Never waste a good crisis”. This has recently become the mantra of key policymakers, who are seizing the moment to enact good legislation. Sadly, the crisis has also dredged up discussion of policies that, if applied, would cause great harm. Protectionism is close to the top of that list.

Is US Housing on the Mend? - March 25, 2009

Wed, 25 March 2009 17:00:00 EST

Three cheers! US housing starts rose 22% in February, the first monthly increase since June, 2008. In a market hungry for good news, this was well-received, fuelling hopes that the industry where the global recession began is finally bottoming out. Is this leading sector on the mend?

Sub-Saharan Setback - March 18, 2009

Wed, 18 March 2009 17:00:00 EST

The woes of the West and key emerging markets are, for the most part, eclipsing the stories of other key regions. If the slowdown is truly global, how is Sub-Saharan Africa faring?

Paying For All the Stimulus - March 11, 2009

Wed, 11 March 2009 17:00:00 EST

“In the long run we are all dead”. In that short quip, John Maynard Keynes famously criticised the hands-off attitude of policy-makers in the 1930s, when short-term economic stimulus was badly needed. Keynes might be proud of today’s policy-makers. But can we afford all of the stimulus?

Canadian Trade Tumbles - March 4, 2009

Wed, 4 March 2009 17:00:00 EST

For world GDP, the fourth quarter of 2008 was ugly. Canada was no exception, as our economy fell into recession, shrinking by an annualized 3.4% in the quarter. But Canada suffered a lot less than most other large economies – strange, given our greater dependence on international trade. Has our resilient domestic economy helped us to sidestep the worst of the global gloom?

GCC Remains Resilient - February 25, 2009

Wed, 25 February 2009 17:00:00 EST

Spreading global weakness is casting doubt on the forecasts for global economic hot spots. Gulf Cooperation Council countries defied description in the boom years, but recently, news out of the region has soured. Has the regional bubble burst, or is the zone still a hothouse of activity?

Is the Inventory Cycle Dead? - February 18, 2009

Wed, 18 February 2009 17:00:00 EST

One clear indication of impending recession is the number of economy-watchers saying “It’s different this time”. Fooled again – so far, the global economy’s woes look pretty similar to past recessions, only moreso. But the phrase hasn’t been dropped completely. With all the recent innovations in inventory management, many are wondering if the inventory cycle is dead.

Get Used to Job Losses, For Now - February 11, 2009

Wed, 11 February 2009 17:00:00 EST

A year ago, pressures on the global labour supply were intensifying. The boom years were a job machine, driving global unemployment rates down to generational lows. Recession has turned the tide, and huge layoffs announcements are now a daily ritual. Last Friday’s job losses in Canada and the US were a shocker. How much more of this are we likely to see?

The Deflation Debate: Myth and Reality - February 04, 2009

Wed, 04 February 2009 17:00:00 EST

Concern about deflation is gathering momentum. The dreaded ‘d’ word surfaced last fall, and is now a regular in business news. It has even crept into emerging market analysis, unimaginable just weeks ago. Are we really on a deflation precipice, or is this just headline-grabbing alarmism?

Are Trade’s Bellwethers Well? - January 28, 2009

Wed, 28 January 2009 17:00:00 EST

All pundits now agree that we’re in a global recession. But views on the depth of the economy’s dive remain divided. The IMF has yet again lowered its global growth forecast for 2009, this time to a paper-thin 0.5%. Others are bound to follow. Conditions are bad, but are they really that bad?

Don’t Disregard Demography - January 21, 2009

Wed, 21 January 2009 17:00:00 EST

Concerns about the current path of the world economy have analysts and strategists transfixed on the latest monthly data releases, and with just cause. Talk about our demographic challenge has all but ceased. It may not be our first worry, but we take our eyes off this issue at our peril.

Trade Confidence Falls to Record Low - January 14, 2009

Wed, 14 January 2009 17:00:00 EST

Confidence tumbled last fall on a number of fronts. Market turbulence, rising retail prices and economic weakening pummelled consumer and business confidence. Canadian exporters, on the front lines of the global slowdown, were big contributors to the growing sense of gloom.

When the seven years of plenty came to an end… - January 07, 2009

Wed, 07 January 2009 17:00:00 EST

Few believe that the standard New Year greeting applies to things economic. The shellshock of last fall’s seismic financial and economic shifts has worn off, and turned into abject pessimism about the near-term future. Bleak stuff to start the year with. What should we be prepared for?

Policy Rates Tumble - December 10, 2008

Wed, 10 December 2008 17:00:00 EST

Still not convinced there’s a serious global economic slowdown in the works? Look no further than actions by key central banks in the last few days. By any measure, interest rate reductions were huge, a needed boost to the economy. But they also suggest more bad news to come.

Construction gets a near-term boost - December 03, 2008

Wed, 03 December 2008 17:00:00 EST

Recent pessimism has created a “flat is the new up” mentality in the economy. With the wrecking ball of recession battering the world economy, talk of growth has all but disappeared, and its mention seems to generate either wistful thinking or a cynical smirk. Even so, growth opportunities do exist in an unlikely sector: non-residential construction.

Speed of recent change breathtaking - November 26, 2008

Wed, 26 November 2008 17:00:00 EST

The adage “one month does not a trend make” was shattered in October. The speed of change in key economic indicators was breathtaking, and wasn’t confined to single economies, industries or ideologies. Analysts’ views on the economy’s near-term path, disparate just weeks ago, now vary only on the severity of the downturn. The dust kicked up by the rapid change and resulting post-October volatility has clouded the economic line of sight significantly.

Where will the credit crunch end? - November 19, 2008

Wed, 19 November 2008 17:00:00 EST

There have been many predictions about where the credit crunch would end, all of which have proven to be overly optimistic. Today, the honest answers range from "It depends" to "I don't know".

China’s Imported Downturn - November 12, 2008

Wed, 12 November 2008 17:00:00 EST

Just when we thought we were running out of superlatives to describe it, China’s economy has hit a snag. Growth has slowed sharply, silencing all who proclaimed China’s immunity to the global slowdown mere months ago. Many inside this modern economic sensation have experienced little of the dynamics of slowdown and decline, but they soon will. This one is just beginning.

The Stalwart Greenback - November 05, 2008

Wed, 05 November 2008 17:00:00 EST

Up’ isn’t a word that describes much in the American economy at the moment. Housing is down, the stock market is down, liquidity is down, and more recently, national output itself is down. And in a rapid reversal, even inflation is down. So why is the U.S. dollar currently on a big tear?

Weathering the Weather - October 29, 2008

Wed, 29 October 2008 17:00:00 EST

Looking out the window isn’t much fun these days. It’s mighty stormy in the global economy, and every day seems a bit wilder. Getting a read on any storm is always tough at ground zero. But even the satellite scan is hard to interpret in today’s super-storm. What does the forecast call for?

Restoring Confidence is Key - October 22, 2008

Wed, 22 October 2008 17:00:00 EST

News media must be ecstatic. In recent weeks, hardly a day has gone by but some major new event has hit the street. Bailouts, bankruptcies, stock market volatility and commodity prices in freefall have almost become commonplace, spurring a frenzied search for superlatives that adequately capture the unfolding story. What are we to make of the financial sector mayhem?

New Vehicle Platforms Buffer Hard Times - October 15, 2008

Wed, 15 October 2008 17:00:00 EST

In any economic slowdown, big-ticket purchases are the first target of penny-pinching consumers. Auto producers know this well, and are feeling the squeeze. Sales are down sharply in the US, by far the world’s largest auto market, raising serious questions about the industry’s prospects.

Japan’s Moment in the Sun - October 08, 2008

Wed, 08 October 2008 17:00:00 EST

A few weeks ago, the prognosis for Japan’s economy was not good – most analysts were convinced the nation was already in recession. But investors have swiftly turned bullish on the economy, and the yen has surged by 6% in the past few days. Is Japan suddenly a good bet?

The Diversification Dividend - October 01, 2008

Wed, 01 October 2008 17:00:00 EST

Everybody knows that Canada is a trading nation. Compare the share of trade to total economic output, and Canada ranks close to the top among large industrialized economies. But take away trade with our number one customer, the U.S. economy, and we’re not much of a trading nation at all. In fact, we are really a North American economy, with a limited stake in the rest of the world. What would Canadian trade activity look like if we were truly a diversified trading nation?

South Africa – No Decoupling Here - September 24, 2008

Wed, 24 September 2008 17:00:00 EST

It wasn't supposed to be this way. Sure, by mid-2007 everyone was expecting the U.S. economy to slow. But commodity producers like South Africa were supposed to be immune - the so-called "decoupling" hypothesis.

Plugging-In to Private Sector Power - September 17, 2008

Wed, 17 September 2008 17:00:00 EST

Energy security led the agenda at last week's XVIII Economic Forum of Central Europe, held in Krynica, Poland. Interest in the topic is not new, but the rise in energy costs over the past year has injected a new sense of urgency into the dialogue.

Sharing Brazil’s Success - September 10, 2008

Wed, 10 September 2008 17:00:00 EST

No discussion of the world’s potential economic powerhouses is complete without mention of Brazil. Recent exciting changes are enabling Brazil to harness that potential more effectively, and the world’s economies are lining up for a piece of the action. Is Canada among the eager suitors?

When the Ships are Down - September 3, 2008

Wed, 3 September 2008 17:00:00 EST

Shipping has been a great barometer of the recent explosion of trade across the planet. Ocean-going carriers have been pushed close to the limit to accommodate vastly increased traffic. But the economic seas have become more stormy, and the shipping industry is feeling the effects.

Inflation’s Great Disappearing Act - August 27, 2008

Wed, 27 August 2008 17:00:00 EST

It’s the last thing anyone would expect when we’re all bracing for slowdown. But surging food and energy prices put inflation high on the list of economic worries earlier this year. World prices for food and energy have since slipped back, but inflation fears remain. Will those fears dissipate?

Weakness from within in South Korea - August 20, 2008

Wed, 20 August 2008 17:00:00 EST

The story is getting all too familiar: yet another economy joining the ranks of those succumbing to the slowdown that began in the large economies. Scoping the reach of the slowdown has turned a lot of attention to bellwether trading economies in the Asia-Pacific zone. In this context, recent softening in South Korea shouldn’t be surprising – is it just a rerun of the unfolding global story?

Is copper feeling a bit green these days? - August 13, 2008

Wed, 13 August 2008 17:00:00 EST

Metals making the headlines at the moment are bronze, silver and gold. As awards, these metals are a standout. But none of them did particularly well in economics class. That honour goes to copper, the metal that didn’t just excel, but earned a PhD. Over the years, it has tracked movements in the global economy well. What is it telling us now?

Is China set for a post-Olympic pause? - August 6, 2008

Wed, 06 August 2008 17:00:00 EST

With just a day to go, all eyes are on Beijing as the world anticipates the 29th modern Olympiad. Excitement over these Games has steadily built, and meticulous preparations mark a thrilling coming of age for the Chinese economy. Billions have been spent on the event, prompting some to predict a post-party recoil. Are these just party poopers, or does the view have some merit?

Forecasters are sharpening their pencils - July 30, 2008

Wed, 30 July 2008 17:00:00 EST

It is the forecaster’s prerogative to revise the outlook. And whether it’s the weather, a flight arrival or the economy, the closer we are to the event, the clearer the forecast becomes. Recent turmoil has prompted sizable changes to the near-term economic outlook. What are pundits now saying?

Has the Celtic tiger been tamed? - July 23, 2008

Wed, 23 July 2008 17:00:00 EST

The Irish renaissance is one of the most dramatic economic transformations of our time. Growth has been on an uninterrupted tear for over two decades, making Ireland the envy of Western economies. But things have recently taken a dramatic turn for the worse. Is this a fleeting development, or is the Celtic tiger in serious trouble?

Exporter jitters deepen - July 16, 2008

Wed, 16 July 2008 17:00:00 EST

For most Canadian exporters, 2008 will be a year of red ink. Few exporting industries are exempt from the recession currently hitting the trade sector, which is weighing heavily on overall economic growth this year. Getting out of this predicament depends on a lot of factors, not the least of which is the fear factor. How are Canadian exporters feeling about their prospects?

Housing not just a US problem - July 9, 2008

Wed, 09 July 2008 17:00:00 EST

Almost two years old and counting, the US housing market crash is still grabbing headlines. It’s no wonder, given the dramatic plunge, its secondary effects and scant signs of recovery. But the US isn’t alone anymore. Housing markets are now faltering in other key economies.

Who’s bucking Canada’s export recession? - July 2, 2008

Wed, 02 July 2008 17:00:00 EST

Open any Canadian newspaper these days, and you are likely to hear about layoffs, shutdowns, and other gloomy pronouncements among Canada’s exporters. Energy exporters and parts of the agri-food sector are largely exempt from this talk. Most other industries are struggling, thanks to slower demand and a high currency. But some in these stressed sectors are bucking the trend.

Plenty of incentive to speculate - June 25, 2008

Wed, 25 June 2008 17:00:00 EST

One of the marvels of recent economic developments is the surge in commodity prices. It wasn’t anticipated, but it has persisted, and the debate about its causes rages on. Two key views have emerged: on one side, those who feel it’s mostly about supply and demand fundamentals, and on the other, those who see a heavy speculative element. Does the latter side have a point?

It's Been A Pleasure - June 18, 2008

Wed, 18 June 2008 17:00:00 EST

It's been seven and a half years since I began writing these weekly commentaries. That's a lot of articles. A perusal of the archives serves as a nice reminder of the wide range of issues that have preoccupied us in these volatile times.

Will the new stagflation persist? - June 11, 2008

Wed, 11 June 2008 17:00:00 EST

Central banks around the world have shifted their collective focus in recent weeks. Those who have been most aggressive in lowering interest rates have gone on hold. Those more hesitant to ease in the first place have tightened their rhetoric. At the core of these moves is a renewed concern about inflation pressures. But if the global economy is slowing, why the inflation fears?

The Southern Cone’s New Deficit - June 4, 2008

Wed, 04 June 2008 17:00:00 EST

At roughly 5% annually, world GDP growth from 2004-07 was well above its speed limit. This put a lot of pressure on the planet’s resources, and tested the limits of existing infrastructure – particularly in emerging markets. The Southern Cone is no exception, facing critical constraints in energy infrastructure. Will the region’s growing energy deficit constrict near-term growth?

Gloom is Growing, and Going Global - May 28, 2008

Wed, 28 May 2008 17:00:00 EST

There hasn’t been much in economic news to brighten the spirits recently. Losses due to the sub-prime crisis continue to mount, soaring commodity prices are biting into disposable income, and economic data shout that world production is slowing. In a little under a year, general economic sentiment has swiftly changed from sanguine to sour. How bad has the mood shift been?

Prairie exports buck the trend - May 21, 2008

Wed, 21 May 2008 17:00:00 EST

Canada’s exports are in recession this year, putting a tight squeeze on the economy. But not all exporters are sharing the pain. While many are seeing double-digit declines in orders, certain others can barely keep up with demand. These contrasts have a strong regional slant that has led to a quick role reversal, turning “have” provinces into have-not’s, and vice versa. Will it last?

Remembering the Victorian Depression - May 14, 2008

Wed, 14 May 2008 17:00:00 EST

The credit crunch is now in its ninth month, prompting some to ask whether the U.S. could enter a period of Japanese-style deflation or another 1930’s-style depression as a consequence. The general feeling is that an astute and fast-acting Federal Reserve can prevent such an outcome. Nevertheless, it is worth thinking about past episodes for insights into the current situation.

Rainy Day Savings Darken US Outlook - May 07, 2008

Wed, 07 May 2008 17:00:00 EST

The sun has shone steadily on the US economy for well over a decade – long enough that many forgot about rainy days. And with the memory lapse, saving for a rainy day became a long-lost practice. But the rain has begun to fall, and a prolonged wet spell is forecast. With savings rates perilously low, US consumers may suddenly get frugal. The consequences would be grim.

Two-Speed Global Economy Explains a Lot - April 30, 2008

Wed, 30 Apr 2008 17:00:00 EST

The world economy today is a study in contrasts – slow growth here, overly rapid growth there, inflation pressures and rising interest rates in some quarters and central banks slashing rates in others. This duality is clear within some countries, too, including Canada, and explains a lot.

Now what? - April 23, 2008

Wed, 23 Apr 2008 17:00:00 EST

Markets have been in denial for awhile, but no more – the global slowdown has arrived. The successive releases of new and gloomier data, and new revelations of excessive spending and investment, and the like, are all the stuff of downturn economics. The mood has rapidly changed from whether, to when and how deep the slowdown will be. Everyone is asking, “Now what?”

NAFTA’s Auto Sector Evolving - April 16, 2008

Wed, 16 Apr 2008 17:00:00 EST

The auto sector has traditionally been front and centre when it comes to understanding Canadian export performance. But recent trends have taken the sector down a notch in relative importance, and the outlook for 2008 is for more of the same.

Exporters Seeking More Risk Management - April 9, 2008

Wed, 09 Apr 2008 17:00:00 EST

Canadian exports rose by an unimpressive 1.4% in 2007. Even so, with the Canadian dollar riding high and the slowdown that emerged in the U.S. economy, it could have been worse. In the circumstances, exporters tapped into EDC's services like never before.

Japan on shaky ground - April 2, 2008

Wed, 02 Apr 2008 17:00:00 EST

The Japanese economy is at it again. Economy-watchers expected a poor showing in the final quarter of 2007, but in a repeat of the fall 2006 experience, the economy surprised on the upside, and by a large margin. Is Japan sidestepping the slowing in the rest of the world?

Exploring America’s Export Success - March 26, 2008

Wed, 26 Mar 2008 17:00:00 EST

The Canadian and U.S. economies are both slowing, but under the surface they could not be more different. Canada is seeing weak exports and strong domestic demand, whereas the U.S. economy is seeing weak domestic demand and strong exports.

Putting China’s Kitty in Perspective - March 19, 2008

Wed, 19 Mar 2008 17:00:00 EST

There is continuing angst around China’s vast accumulation of foreign exchange reserves. What will they do with all that money, buy the crown jewels? Switch into euros? No one really knows.

Someone tell commodities there’s a slowdown going on - March 12, 2008

Wed, 12 Mar 2008 17:00:00 EST

The marketplace is fast realizing that a global economic slowdown is in the works. Everyone seems to be convinced – except those irrepressibly bullish commodity markets. If slowdown is here, and key markets close to recession, why are commodity prices so high?

Can profits weather the slowdown? - March 5, 2008

Wed, 5 Mar 2008 17:00:00 EST

The profitability of Canadian companies remained strong overall at least until the end of 2007, despite concerns about the economic storm clouds gathering just south of the border. Is the situation unique, and therefore sustainable, or an accident waiting to happen?

Is the Slowdown Spreading? Ask Producers - February 27, 2008

Wed, 27 Feb 2008 17:00:00 EST

Last year, decoupling was all the rage. Sure, the US economy was going flat, but many asserted that the malaise was more or less confined within US borders. But what was loudly proclaimed mere weeks ago has now gone strangely silent. Is decoupling dead, or has it just gone dormant?

Credit Crunch Symptoms Spreading - February 20, 2008

Wed, 20 Feb 2008 17:00:00 EST

What began as an aberration in U.S. commercial paper markets six months ago has become much more, affecting financial institutions and individuals world-wide. What will the fallout be?

Mexico Faces America’s Slump - February 13, 2008

Wed, 13 Feb 2008 17:00:00 EST

Mexico has demonstrated its resilience through a number of global financial storms in recent years. Can that continue, with the U.S. economy teetering on the edge of recession?

The Outlook According to Housing: Gloomy - February 6, 2008

Wed, 06 Feb 2008 17:00:00 EST

Housing markets have once again proven their economic prowess. U.S. housing starts fell sharply in mid-2006, fully 18 months ahead of the softening in the broader U.S. economy – a remarkable lead on an economic slowdown that most agree is now going global. So given its foresight, is this keen sage saying anything about impending recovery?

Exporters More Brave than Resilient - January 30, 2008

Wed, 30 Jan 2008 17:00:00 EST

Canada’s exporters were hit with the perfect storm in 2007. Yet the value of exports rose by more than 2% during the year, suggesting an unexpected degree of exporter resilience. EDC’s latest exporter survey shows, however, that exporter confidence wilted in the final weeks of the year.

How low can oil prices go? - January 23, 2008

Wed, 23 Jan 2008 17:00:00 EST

Oil prices have broken below the psychologically-important $90 level, leading speculators who have bet heavily on $100-plus oil to consider bailing out of the market. For real consumers, in contrast, this is good news – and the question is, how much better can it get?

U.S. Trade Imbalance Receding - January 16, 2008

Wed, 16 Jan 2008 17:00:00 EST

Despite six years of U.S. dollar depreciation, international trade imbalances remain a major preoccupation for financial markets and policymakers alike. What is in prospect for 2008?

The Canada-U.S. FTA: 20 Years After - January 9, 2008

Wed, 09 Jan 2008 17:00:00 EST

Twenty years have passed since the signing of the Canada-U.S. Free Trade Agreement, which went into effect 19 years ago. It’s a good time to check the report card, to see how we are doing.

Surprise of the Year: Deflation Dissipation - December 19, 2007

Wed, 19 Dec 2007 17:00:00 EST

Each year, just before the holidays, we take a look back and recall the surprises that took place in the previous 12 months. 2007 was loaded with candidates.

Labour Shortages are Global - December 12, 2007

Wed, 12 Dec 2007 17:00:00 EST

We hear about labour shortages a lot – there are not enough doctors, carpenters, plumbers, or skilled workers in general (except, perhaps, economists). This is becoming a global problem.

Back to the 70s: That was then, this is now - December 5, 2007

Wed, 05 Dec 2007 17:00:00 EST

Those of us with grey hair have noticed that there are a lot of parallels between our current economic situation and that of the 1970s. But there are differences, too, and these are important enough to suggest that things will be different this time.

Poland Playing the Investment Game Well - November 28, 2007

Wed, 28 Nov 2007 17:00:00 EST

For any country to win its fair share of global investment has always been difficult. Poland has been doing well at the investment game, but the competition is about to get a lot tougher.

A Kingdom Rich in Opportunity - November 21, 2007

Wed, 21 Nov 2007 17:00:00 EST

A visit to Boomtown, Saudi Arabia incites awe, while at the same time helping to dispel certain fears. Although the place is not without problems, opportunities abound.

Bubble, Bubble, Oil in Trouble? - November 14, 2007

Wed, 14 Nov 2007 17:00:00 EST

Black gold is on a tear again. Oil prices are currently within a hair of the psychologically-sensitive $100 mark, and the trajectory is steep. This is perhaps good news for the oil patch, but given oil’s effect on the Canadian dollar, many are worried. Will the price spike last?

Canada’s Two-Track Economy to Persist - November 7, 2007

Wed, 07 Nov 2007 17:00:00 EST

High and rising prices for metals, oil and food have put the global economy on two independent growth tracks. The adjustments this is fostering can be painful, and there is no let-up in sight.

Exporter Situation to Worsen Before Improving - October 31, 2007

Wed, 31 Oct 2007 17:00:00 EST

Canada’s overall export performance is forecast to remain lacklustre in 2008. And there will continue to be a wide range of experience across specific export markets and particular sectors.

Global Forex Flows Titanic - October 24, 2007

Wed, 24 Oct 2007 17:00:00 EST

Many think of central banks as powerful institutions, able to use their capital to defend their currencies against the uncertain ebbs and flows of the marketplace. But a recent survey by the Bank for International Settlements gives a better idea of what central banks are up against.

How American Companies Dealt with an Overvalued Dollar - October 17, 2007

Wed, 17 Oct 2007 17:00:00 EST

Exchange rate forecasts are generally built on a model of economic fundamentals. However, exchange rates have been known to stray from their fundamentals for long periods of time, so companies need an adjustment strategy even if they believe the currency will eventually ease.

Is loonie strength due merely to eagle weakness? - October 10, 2007

Wed, 10 Oct 2007 17:00:00 EST

With the Canadian loonie flying alongside the American eagle, it is easy to forget that just 200 days ago the former was cruising 15 cents below the latter. How, exactly, did we get here?

Will the South be resilient to Northern turmoil? - October 3, 2007

Wed, 03 Oct 2007 17:00:00 EST

A recent visit to Argentina and Chile reveals a singular preoccupation in the region. Specifically, local business people are watching the financial market turmoil associated with America’s sub-prime mortgage market, and wondering what implications it will have for them.

China Still Struggling to Contain Inflation - September 26, 2007

Wed, 26 Sep 2007 17:00:00 EST

Just two months ago, central banks around the world were almost unanimously fixated on budding inflation pressures. Financial market turmoil in August changed the tune overnight, and economic slowdown is now the big worry. Except in China. The unstoppable economy is still facing capacity constraints, and price movements are illustrating the strain.

Wood Producers Caught In a Vise - September 19, 2007

Wed, 19 Sep 2007 17:00:00 EST

At the heart of the slowdown emerging in the U.S. economy is an outright recession in the housing sector. Although many companies, both in Canada and abroad, will feel the effects of this, none are more directly impacted than Canada's wood product manufacturers.

American Consumer Psychology - September 12, 2007

Wed, 12 Sep 2007 17:00:00 EST

The world economic outlook appears to be especially uncertain at the moment, as evidenced by increased financial volatility as investors seek new direction. And the key to the outlook is the American consumer, on whom the world economy has persistently relied.

Positive Profit Picture Hides Underlying Stresses - September 5, 2007

Wed, 05 Sep 2007 17:00:00 EST

Although economists examine a complex array of statistics when assessing the health of an economy, nothing says more than the underlying profitability of its companies. Good profits are generally associated with secure jobs, higher investment spending and good tax revenues.

America’s Trade Deficit: Still worrisome after all these years? - August 29, 2007

Wed, 29 Aug 2007 17:00:00 EST

Probably the most oft-mentioned problem facing the world economy and financial markets is the U.S. trade deficit. This has been the case for the past five years, yet not much has happened.

At least the rest of the world is strong… right? - August 22, 2007

Wed, 22 Aug 2007 17:00:00 EST

A key source of comfort during the financial turmoil of recent weeks has been the consensus that the world economy remains strong. This is important, for it means that even if the financial contagion continues to spread, the world economy will prove resilient to the shock.

Tackling High European Labour Costs - August 15, 2007

Wed, 15 Aug 2007 17:00:00 EST

High labour costs are a prominent feature of Europe’s economic landscape. To outsiders, generous wage, vacation and sick-leave provisions, together with a tight social safety net, are the stuff of dreams. Globalisation has put continental Europe’s labour costs under the microscope, and Germany’s collaborative response has helped it to emerge as a regional growth leader.

Beneath the Surface, Eroding Confidence - August 08, 2007

Wed, 08 Aug 2007 17:00:00 EST

Global financial markets have witnessed a series of convulsions in recent weeks, whether in stocks, bonds or currencies. Many are describing it as a healthy correction, because some markets had risen too far, too fast – in other words, the bull run is intact, but taking a breather.

Car Production Clouding Economic Signals - August 01, 2007

Wed, 01 Aug 2007 17:00:00 EST

Economists have at their disposal an amazing array of statistics on the economy – production, sales, shipments, exports and imports, employment, and so on. Rarely do all these statistics offer the same story, and sometimes a single development can truly cloud things.

Exports to South America Booming - July 25, 2007

Wed, 25 Jul 2007 17:00:00 EST

Canada's exports have been stuck in low gear for some time, and the strong dollar and U.S. slowdown point to more weakness ahead. But our exports to South America are booming.

Managing the Surging Wealth of Nations - July 18, 2007

Wed, 18 Jul 2007 17:00:00 EST

Governments across the world are cashing in on recent good economic times. Sovereign wealth in a wide array of nations has ballooned over the last few years, and further growth is likely in the coming years. Managing these swollen funds is becoming a growing challenge.

Export Outlook Upgrade - July 11, 2007

Wed, 11 Jul 2007 17:00:00 EST

Last spring, EDC Economics was forecasting no growth in Canada's exports for 2007. Recent developments are leading us to upgrade this outlook modestly.

Demystifying Political Risk - July 04, 2007

Wed, 04 Jul 2007 17:00:00 EST

Exporters and foreign investors face a wide array of risks when doing business abroad. Political risk may be the least understood, leading some companies to ignore it altogether and take unnecessary risks, while others worry too much about it and pass on key growth opportunities.

Is it really different this time? - June 27, 2007

Wed, 27 Jun 2007 17:00:00 EST

Financial markets are priced for perfection, with each warning brushed off by investors. Should we be more worried, or is it really different this time?

Canadian Labour Market Remaking Itself - June 20, 2007

Wed, 20 Jun 2007 17:00:00 EST

Canadian manufacturers and their employees are deeply worried about the future. There have been job losses and plant shutdowns. So, why is unemployment in Canada at a 30-year low?

Aerospace Exports Flying High, Flying Low - June 13, 2007

Wed, 13 Jun 2007 17:00:00 EST

Canada's aerospace sector has seen it all in the past five years - boom, bust, and everything in between. Today, the sector still finds itself flying both high and low, at the same time.

Is Canada decoupling from the U.S.? - June 6, 2007

Wed, 6 Jun 2007 17:00:00 EST

Recent figures show that the U.S. economy did a face-plant in 2007Q1, while Canada was humming. This has cemented the perception that Canada is decoupling from the U.S.

Canada's Banks Are Exporters too - May 30, 2007

Wed, 30 May 2007 17:00:00 EST

Even those who have heard about the various forays into the global economy by Canadian banks tend to think of them as a domestic business. Well, think again.

Blame the Yen Carry Trade - May 23, 2007

Wed, 23 May 2007 17:00:00 EST

Is your currency rising unexpectedly? Blame the yen carry trade! Can't figure out why copper prices are so volatile? Blame the yen carry trade! These days, the yen carry trade is being blamed for everything, and is popping up in everyday conversation.

Loonie's Northern Flight - May 16, 2007

Wed, 16 May 2007 17:00:00 EST

Just like last year, Canada's beloved loonie has decided it is time to head north, and is surprising everyone with how far it is willing to go. The real question, though, is where will it choose to nest?

Mexican Resilience Increasing - May 9, 2007

Wed, 9 May 2007 17:00:00 EST

Mexico has come a long way since the so-called Tequila crisis of 1994. Nowadays, Mexico gets caught up in global volatility just like everyone else, but is on the resilient end of the spectrum.

Something Good Going Down Under - May 2, 2007

Wed, 2 May 2007 17:00:00 EST

Australia is becoming a sizeable market for Canadian exports, while being a tough competitor against Canada in third markets at the same time. Australia’s trade success warrants more study.

Adapting to the New Trade Paradigm - April 25, 2007

Wed, 25 Apr 2007 17:00:00 EST

Change is a constant in our lives today, and adaptability is highly rewarded in business. But only rarely is a change so fundamental that it changes everything – a paradigm shift.

Exports to Remain Flat for Two More Years - April 18, 2007

Wed, 18 Apr 2007 17:00:00 EST

EDC Economics has just released its latest Global Export Forecast, and the story is a discouraging one for exporters. After a flat overall performance in 2006, exporters appear to be headed for two more years of little or no growth in total export sales.

Global Growth Speed Limit Edging Higher - April 11, 2007

Wed, 11 Apr 2007 17:00:00 EST

Economies all have speed limits. Let an economy grow above its speed limit for any length of time, and inflation results. That’s why central banks are so preoccupied with staying within the speed limit, even though most individuals would prefer stronger growth, other things equal.

China’s Trillion Dollar Nest Egg - April 4, 2007

Wed, 04 Apr 2007 17:00:00 EST

China has now accumulated more than $1 trillion in foreign exchange reserves. Crossing this symbolic threshold has led many to underscore the destabilization potential of the situation.

Canada Losing Ground in Trade - March 28, 2007

Wed, 28 Mar 2007 17:00:00 EST

The importance of trade to Canadian prosperity has increased a lot in the past 40 years. Since the dawn of the new millennium, though, Canada has been losing ground in the trade domain.

Venezuela’s Oil Addiction - March 21, 2007

Wed, 21 Mar 2007 17:00:00 EST

The world is addicted to oil, as everyone knows. But there are few places with an addiction as deep, and as potentially destabilizing, as in Venezuela.

Bush's Lost Jobs - The Fuller Story - March 14, 2007

Wed, 14 Mar 2007 17:00:00 EST

George W. Bush has been blamed for many things. But one that comes up repeatedly is the loss of 3 million manufacturing jobs, which many critics attribute to his trade policies.

Exports More Diversified in 2006 - March 7, 2007

Thu, 8 Mar 2007 10:00:00 EST

The final numbers are now in for Canada’s trade in 2006. Many exporters will remember 2006 as a tough year, but there are some rays of sunshine between those clouds.

How are America’s consumers holding up? - February 28, 2007

Wed, 28 Feb 2007 17:00:00 EST

America’s consumers have been carrying the global economy on their shoulders for so long now that we have come to take them for granted. But the ground has shifted beneath their feet in the last few months, so it is worth keeping track of how they are holding up.

Just another flash in Japan? - February 21, 2007

Wed, 21 Feb 2007 17:00:00 EST

Recent economic news from Japan has been good, so much so that it has people talking about a renaissance and a return to strong growth. The Bank of Japan is even raising interest rates.

City Economics - February 14, 2007

Wed, 14 Feb 2007 17:00:00 EST

Have you ever looked at one of those satellite photos of the earth, taken during night-time? It is truly a remarkable sight, and full of economic meaning, besides.