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WJestin - 15-12-02v2 Toronto Real Estate Forum (Warren ... · 12/2/2015 · Canada Forecasts at...
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2016 Outlook: Warren Jestin SVP & Chief Economist - Scotiabank The Economics of Change Real Estate Forum - Toronto December 2, 2015
Transcript of WJestin - 15-12-02v2 Toronto Real Estate Forum (Warren ... · 12/2/2015 · Canada Forecasts at...
2016 Outlook:
Warren JestinSVP & Chief Economist - Scotiabank
The Economics of Change
Real Estate Forum - TorontoDecember 2, 2015
The U.S. Gears Up . . . Gradually
Source: Statistics Canada, BEA, Bloomberg, Scotiabank Economics.
-5
-4
-3
-2
-1
0
1
2
3
4
5
2007 08 09 10 11 12 13 14 15f 16f
annual % change
Real GDP Growth
U.S.U.K.
Euro zone
Canada
Forecasts at November 2, 2015
Warren Jestin Page 1 Real Estate Forum - Toronto (Dec. 2, 2015)
Unemployment Rate
Source: Statistics Canada, BLS, Bloomberg, Scotiabank Economics.
0
2
4
6
8
10
12
14
2007 08 09 10 11 12 13 14 15f 16f
U.K.
U.S.
Canada
%
Improved U.S. Job Prospects Fuel Consumer Confidence . . .
Euro Zone
Forecasts at November 2, 2015
Warren Jestin Page 2 Real Estate Forum - Toronto (Dec. 2, 2015)
Source: Bloomberg, Scotiabank Economics.
. . . Supported by Income Gains . . .
100
105
110
115
120
125
130
135
2007 08 09 10 11 12 13 14
Euro zone
U.S.
CanadaU.K.
Growth In Personal Disposable Income
Index 2007=100
Warren Jestin Page 3 Real Estate Forum - Toronto (Dec. 2, 2015)
. . . & Years of Pent-up Demand
8
9
10
11
12
2007 08 09 10 11 12 13 14
years
Canada
U.S.
Source: Wards Automotive, DesRosiers Automotive Consultants
Average Age Of Motor Vehicles
Warren Jestin Page 4 Real Estate Forum - Toronto (Dec. 2, 2015)
Source: Bloomberg, Scotiabank Economics.
Weak C$ Undercuts Purchasing Power But Boosts Competitiveness
70
80
90
100
110
120
130
2007 08 09 10 11 12 13 14
Euro zone
U.S.Canada
U.K.
Personal Disposable Income Gains in US$
Index 2007=100
Incomes adjusted to US$
Warren Jestin Page 5 Real Estate Forum - Toronto (Dec. 2, 2015)
Emerging Nations Are Still Major Drivers of Global Growth . . .
Source: IMF WEO April 2015, Scotiabank Economics.
0
1
2
3
4
5
6
1990 2000 2007 2010 2014f 2019fEmerging and Developing Markets(share of total world GDP)
Advanced Economies(share of total world GDP)
64%
36%
58%
42%
52%
48%
47%
53%
44%
56%
global growth &share of real GDP
41%
59%
World GDP Growth
Warren Jestin Page 6 Real Estate Forum - Toronto (Dec. 2, 2015)
Source: Bloomberg, Scotiabank Economics. *Urban households.
. . . Supported by Rapid Income Gains
100
120
140
160
180
200
220
240
260
280
2007 08 09 10 11 12 13 14
Euro zoneU.S.
CanadaU.K.
Growth In Personal Disposable Income
Index 2007=100
China*
Warren Jestin Page 7 Real Estate Forum - Toronto (Dec. 2, 2015)
But China Is Gearing Down . . .
4
8
12
16
2007 08 09 10 11 12 13 14 15f 16f
y/y % change
Services
Total
Goods
Source: National Bureau of Statistics of China, Scotiabank Economics.
Forecasts at November 2, 2015
China GDP
Warren Jestin Page 8 Real Estate Forum - Toronto (Dec. 2, 2015)
. . . & Emerging Market Trends Are Uneven . . .
Source: Bloomberg, Scotiabank Economics.
-4
-2
0
2
4
6
8
10
12
14
16
2007 08 09 10 11 12 13 14 15f 16f
annual % change
Real GDP Growth
Brazil
China
India
Forecasts at November 2, 2015
Warren Jestin Page 9 Real Estate Forum - Toronto (Dec. 2, 2015)
Source: CPB Netherlands Bureau of Economic Research.
World Trade Growth Is Low & Slow
-20
-15
-10
-5
0
5
10
15
20
2007 08 09 10 11 12 13 14 15
y/y % change
World Trade Volumes
. . . Undercutting World Trade . . .
Warren Jestin Page 10 Real Estate Forum - Toronto (Dec. 2, 2015)
Source: Bloomberg, Scotiabank Economics.
0
20
40
60
80
100
120
140
160
180
200
2007 08 09 10 11 12 13 14 15f 16f
index, 2007Q1 = 100
WTI Oil
Natural Gas
Copper
. . . & Depressing Oil & Other Commodities
Commodity Prices
Forecasts at November 2, 2015
Warren Jestin Page 11 Real Estate Forum - Toronto (Dec. 2, 2015)
Source: Bloomberg, Scotiabank Economics.
70
80
90
100
110
120
130
140
150
160
2007 08 09 10 11 12 13 14 15f 16f
exchange rate with US$ index, 2007Q1 = 100 Yen
Euro
U.S. Dollar Underpinned By Domestic Strength & International Risks
Currencies vs. U.S. Dollar
Forecasts at November 2, 2015
Renminbi
Warren Jestin Page 12 Real Estate Forum - Toronto (Dec. 2, 2015)
Source: Bloomberg, Scotiabank Economics.
0.60
0.65
0.70
0.75
0.80
0.85
0.90
0.95
1.00
1.05
1.10
2007 08 09 10 11 12 13 14 15f 16f
vs. US$
Canadian Dollar
Australian Dollar
The U.S. Dollar Also Flies High Against Commodity Currencies
A Sharp Slide from Parity
Forecasts at November 2, 2015
Warren Jestin Page 13 Real Estate Forum - Toronto (Dec. 2, 2015)
-1
0
1
2
3
4
5
2007 08 09 10 11 12 13 14 15f 16f
U.K.
Consumer Prices
Source: Statistics Canada, BLS, Bloomberg, Scotiabank Economics.
Inflation Interrupted … Again
U.S.
Canada
y/y % change, end of period
Euro zone
Forecasts at November 2, 2015
Warren Jestin Page 14 Real Estate Forum - Toronto (Dec. 2, 2015)
0
1
2
3
4
5
6
2007 08 09 10 11 12 13 14 15f 16f
Source: Bank of Canada, U.S. Federal Reserve, ECB, Bank of England, Scotiabank Economics.
Central Bank Rates
U.S.
per cent
Canada
Monetary Policy Is On Hold For Now . . .
Euro zone
Forecasts at November 2, 2015
U.K.
Warren Jestin Page 15 Real Estate Forum - Toronto (Dec. 2, 2015)
0
1
2
3
4
5
6
2007 08 09 10 11 12 13 14 15
10-Year Government Bond Yields
Source: Bloomberg, Scotiabank Economics.
. . . With Bond Yields Still Near Lifetime Lows
U.S.
Canada
per cent
Germany
U.K.
Warren Jestin Page 16 Real Estate Forum - Toronto (Dec. 2, 2015)
30
50
70
90
110
130
150
2007 08 09 10 11 12 13 14 15
Autos & Parts
Canadian Exports
Energy
Source: Statistics Canada, Scotiabank Economics.
Changing Global Fortunes Have Big Impact on Canadian Economy
$ bns, annualized,3-month moving average
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Economic & Market Outlook
Forecasts at November 2, 2015
Warren Jestin Page 18 Real Estate Forum - Toronto (Dec. 2, 2015)
Disclaimer
TM Trademark of The Bank of Nova Scotia. Used under license, where applicable.
This report has been prepared by Scotiabank Economics as a resource for the clients of Scotiabank. Opinions, estimates and projections contained herein are our own as of the date hereof and are subject to change without notice. The information and opinions contained herein have been compiled or arrived at from sources believed reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness. Neither Scotiabank nor its affiliates accepts any liability whatsoever for any loss arising from any use of this report or its contents.
