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, reflecting concerns about high household leverage, declining commodity prices and recent weakness in US economic data.
We forecast 2.1% real GDP growth in 2014 and 2.3% growth in 2015. As we have previously noted, our stronger growth forecasts over the next few years by no means represent a firmly optimistic outlook on the economy, as we remain below consensus. Indeed, a recent monthly Bloomberg survey shows consensus expectations of 2.2% and 2.5% in 2014 and 2015 respectively, with this year's reading being a revision from 2.3% previously, suggesting that consensus is slowly converging with our own projection of 2.1% growth for this year.
In 2014, we have pencilled in a very poor year for the Canadian shipping sector due primarily to the industrial action that has significantly affected throughput at Port Metro Vancouver. We anticipate contractions in both tonnage and box terms at the port this year due to the disruption. Meanwhile, the port of Montreal is expected to register year-on-year (y-o-y) growth of just 1.00% in tonnage throughput handled, while box throughput will fare better (2.96%).
Headline Industry Data
2014 Port of Vancouver tonnage throughput forecast to contract 2.81%. We project throughput to reach 131.213mn tonnes in 2018.
2014 Port of Vancouver container throughput forecast to contract 1.00% to reach 2.78mn twenty-foot equivalent units (TEUs). Over the medium term, we project throughput to reach 3.505mn TEUs.
Key Industry Trends
Short-Term Downside On Strike Action, But FTA To Boost Medium Term : Two key developments highlight the mixed outlook for the port of Metro Vancouver over the short and medium term. In the short term, Canada's biggest port is battling industrial action, with a...