Business Monitor International


Canada Business Forecast Report

Published 23 April 2014

  • 33 pages
  • Instant access to your report online and PDF format through your account library
  • Includes 3 free updated quarterly reports
 
$1,195.00
Canada Business Forecast Report

Core Views

  • Economic growth in Canada will gradually accelerate over the next few years, helped by a continued expansion in private consumption and a return to positive growth in fixed investment. Our growth outlook, however, remains below consensus expectations, our reflecting concerns about high household leverage, declining commodity prices, and recent weakness in US economic data .

  • Exchange rate depreciation and stronger US demand will see Canada's trade in goods balance move from deficit into surplus by 2016, which will continue to narrow the current account deficit over the coming years. Despite recent depreciation, we believe that the Canadian dollar remains fundamentally overvalued, and continued weakness in 2014 will help to revive manufactured goods exports to a strengthening US economy.

  • Monetary policy will remain unchanged in Canada until 2015, when the Bank of Canada will commence a gradual tightening cycle, as exchange rate weakness and rising industrial capacity utilisation see inflation move towards the central bank's 2% target. In the near term, however, an interest rate cut is not out of the question should economic data show renewed weakness.

Key Forecast Changes

  • We have not made any major forecast changes this quarter.

Key Risks To Outlook

  • Downside Risks To Growth Forecast: Exogenous factors, such as declining commodity prices and an erratic economic recovery in the US, could have more profound effects on our real GDP growth projections in the near term. However, we feel that our below-consensus forecasts currently reflect our more cautious outlook in this respect.

  • Downside Risks To Long-Term Forecast: High household leverage and elevated housing prices pose the biggest downside risk to Canada's economy. Canadian households have not deleveraged over the past five years, in which US household debt-to-GDP fell from a peak of 95.5% in Q109 to 76.7% in Q413. Canadian household debt-to-GDP, meanwhile, continued to climb...

Table of Contents

Executive Summary
5
Core Views
5
Key Risks To Outlook
5
Chapter 1: Political Outlook
7
SWOT Analysis
7
BMI Political Risk Ratings
7
Domestic Politics
8
Resource Nationalism In Focus
8
TABLE: POLITICAL OVERVIEW
8
Strong Foundation, But Some Challenges From Within
9
Chapter 2: Economic Outlook
11
SWOT Analysis
11
BMI Economic Risk Ratings
11
Economic Activity
12
Slowdown Underway
12
TABLE: GDP BY EXPENDITURE, REAL GROWTH %
12
TABLE: LONG-TERM MACROECONOMIC FORECASTS
13
Monetary Policy
14
BoC To Remain On The Sidelines Until 2014
14
TABLE: MONETARY POLICY
14
Chapter 3: Key Sectors
17
Agribusiness
17
TABLE: WHEAT PRODUCTION & CONSUMPTION, 2012-2017
18
TABLE: CORN PRODUCTION & CONSUMPTION, 2012-2017
18
TABLE: BARLEY PRODUCTION & CONSUMPTION, 2012-2017
18
TABLE: POULTRY PRODUCTION & CONSUMPTION, 2012-2017
20
TABLE: PORK PRODUCTION & CONSUMPTION, 2012-2017
20
TABLE: BEEF & VEAL PRODUCTION & CONSUMPTION, 2012-2017
20
TABLE: MILK PRODUCTION & CONSUMPTION, 2012-2017
23
TABLE: BUTTER PRODUCTION & CONSUMPTION, 2012-2017
23
TABLE: CHEESE PRODUCTION & CONSUMPTION, 2012-2017
23
Petrochemicals
25
TABLE: CANADA PETROCHEMICALS FORECASTS, 2010-2017
26
Other Key Sectors
29
TABLE: AUTOS SECTOR KEY INDICATORS
29
TABLE: FOOD AND DRINK SECTOR KEY INDICATORS
29
TABLE: INFRASTRUCTURE SECTOR KEY INDICATORS
30
TABLE: DEFENCE AND SECURITY SECTOR KEY INDICATORS
30
TABLE: PHARMA SECTOR KEY INDICATORS
30
TBALE: TELECOMS SECTOR KEY INDICATORS
31
TABLE: FREIGHT SECTOR KEY INDICATORS
31
Chapter 4: BMI Global Assumptions
33
Global Outlook
33
Growth May Be Turning The Corner
33
TABLE: GLOBAL ASSUMPTIONS
33
TABLE: DEVELOPED STATES, REAL GDP GROWTH FORECASTS
34
TABLE: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS (%)
34
TABLE: EMERGING MARKETS, REAL GDP GROWTH FORECASTS
35

The Canada Business Forecast Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Canada and is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market.

An influential new analysis of Canada's economic, political and financial prospects through end-2017, just published by award-winning forecasters, Business Monitor International (BMI).

Key Uses

  • Forecast the pace and stability of Canada's economic and industry growth through end-2017.
  • Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
  • Assess the critical shortcomings of the business environment that pose hidden barriers and costs to corporate profitability.
  • Contextualise Canada's country risks against regional peers using BMI's country comparative Risk Rankings system.
  • Evaluate external threats to doing business in Canada, including currency volatility, the commodity price boom and protectionist policies.

The Canada Business Forecast Report by Business Monitor International (BMI) includes four major sections: Economic Outlook, Political Outlook, Business Environment and Key Sector Outlook.

Economic Outlook:

How will the Canada economic policy-making and performance impact on corporate profitability over 2013-2017?

BMI provides our fully independent 5-year forecasts for Canada through end-2017 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.

Economic Outlook Contents

The Canada Business Forecast Report features BMI's forecasts with supporting analysis for 2013 through to end-2017, set against government views and BMI's evaluation of global and regional prospects.

Key Areas Covered:

Data:

  • Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
  • BMI's comprehensive Risk Rankings system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.

Written Analysis:

  • Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).
  • Balance of Payments - trade and investment, current and capital account.
  • Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
  • Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.
  • Fiscal Policy - macroeconomic strategy and policies, government finance and tax reforms.
  • Foreign Direct Investment - approvals, inflows and climate.
  • External Debt - debt profile (short and long-term plus public and private sector exposure).
  • Global Assumptions - forecasts for each year to end-2017 covering: major commodities, growth in key regions, inflation, and interest and exchange rates, in the United States, Japan, China and the eurozone.

Key Benefits

  • Rely upon BMI's 100% independent forecast scenarios for Canada and underlying assumptions - we take no advertising and are privately-owned.
  • Exploit the benefits of BMI's comprehensive and reliable macroeconomic database on Canada, sourced and fully maintained by BMI from an extensive network of private sector, government and multilateral contacts.
  • Gain key insights into the current and future direction of government economic policy, which could significantly affect your company's business prospects, from BMI's team of analysts and economists.

Political Outlook:

What are the political risks to doing business in Canada over the next 5-years?

BMI's Canada country Risk Rankings evaluate the short- and medium-term threats to political stability.

Political Outlook Contents

  • SWOT Analysis for the Canada Market - Political Strengths, Weaknesses, Opportunities and Threats facing Canada.
  • Political Stability and Risk Assessment - BMI's Risk Rankings assess explicit short- and long-term risks to political stability; latest ankings, rankings and trends for Canada's risk are compared with regional and global averages.
  • Current Administration and Policy-making BMI assesses the threats to the continuity of economic policy, and likely changes to the business operating environment.

Key Benefits

  • Benchmark Canada's risk profile against its neighbours, the global and regional average, allowing easy comparison of risks between key business markets.
  • Identify, evaluate and anticipate political and security risks to the business environment, and to your company's current operations and future plans.
  • Gain valuable insights into government and policy-making, through BMI's specialist team of analysts and economists, and their network of private and public sector sources.

Business Environment

Business Environment Risk Rankings with SWOT Analysis - Business Environment Risk Rankings for Canada, benchmarked against rankings for regional neighbours.

Country Competitiveness - Competitiveness of Canada's business operating environment in supporting corporate growth and profitability, compared with regional neighbours.

Business Environment Contents

  • Domestic Environment - Transparency, cronyism and corruption; labour market flexibility; corporate tax burden; interest rate levels; sophistication of banking sector and stock market; levels of business confidence; infrastructure and IT.
  • Foreign Direct Investment - Analysis of foreign investment regime; foreign ownership laws; attractiveness of business environment to foreign investors.
  • Foreign Trade - Analysis of trading environment, government trade policy, liberalisation measures, tariffs and membership of trade areas.

Key Benefits

  • Assess your company's evolving exposure to country specific operational and business risks, using BMI's in-depth analysis of the legal and regulatory business environment.
  • Understand your market's comparative strengths and weaknesses in the key areas of commercial infrastructure and business institutions, using BMI's proprietary global Business Environment Risk Rankings.

Key Sector Outlook

Which industry sectors in Canada will grow fastest, and where are the major investment opportunities in the market?

BMI's identifies investment opportunities in Canada's high growth industries including automotives, defence & security, food & drink, freight transport, infrastructure, oil & gas, pharmaceuticals & healthcare and telecommunications & IT.

Key Areas Covered:

  • Market Overview - Size and value of each industry with developments over 2008-2012, covering major industry key performance indicators (KPIs) that have impacted company performance.
  • 5-year Industry Forecasts - Forecasts for each year over 2013-2017, using BMI's proprietary industry modeling technique, which incorporates all key domestic and international indicators - including economic growth, interest rates, exchange rate outlook, commodity prices and demographic trends - to provide fully integrated forecasts across, and within, each industry.
  • Demand- and Supply-Side Data/Forecasts - BMI's industry data covers both the output of each industry and the domestic demand, offering clear analysis of anticipated import/export trends, as well as capacity growth within each industry.

Key Benefits

  • Target strategic opportunities in high growth industries, which are benefiting from global mega trends, and thus offer strong investment and growth opportunities.
  • Compare the growth path of different industries to identify which are best placed to benefit from domestic and international economic prospects, and which have historically suffered from volatile growth trends - a key indicator of future risks.

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Testimonials

The sections that I find most interesting and useful are the macroeconomic data and forecasts for the country, top export destinations and economic activity. The indicators/analysis of these areas helps us orient our thinking, our assumptions and, consequently, our decisions in the commercial area.

Country Manager, DHL Express