SwissRe Economic Outlook October 2004

Canada�s economy has been an oasis of calm in the face of pessimism about the global economy. Retail sales and manufacturing shipments have hit record high levels. Full-time employment growth has been strong, and the Ivey Purchasing Managers’ Index (PMI) increased to 66.0 for September, a rise of 11.1% over the previous year. These factors will likely push economic growth to 3.6% this quarter. However, this is probably the peak for growth.

The Bank of Canada (BoC) will raise interest rates two times, by 25 basis points, before the end of the first quarter of 2005.

Employment rebounded with 43,200 new jobs in September. The housing market is strong but weakening. Healthy employment and asset growth have pushed retail sales to a new record.
Export growth has been strong recently due to rebounding US growth. Foreign trade will be a drag on growth next year.

The Federal budget forecasts, now too low, will become more accurate.

( Full Report, 2 pages, pdf, 25KB ).

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