Time for your cheat sheet on this week’s most important stories.
Canadian Real Estate
Canadian Parliament’s Forecast Includes Unemployment Peaking In Q3
Canadian parliament’s economic forecasts include unemployment rising even further. The PBO economic forecast currently sees 14.8% unemployment in Q2, and the ratio peaking at 15% in Q3. At the end of last year there were 1.155 million unemployed people looking for work in Canada. By the end of 2020, that number is expected to nearly triple to 3.067 million. Since this is a rapidly evolving situation, these forecasts will rise or fall, depending on how long the lockdown lasts.
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Canadian Small Businesses Sentiment Improves, But 63% See Further Layoffs
Small business confidence improved, but two-thirds are planning more layoffs. The confidence index reached 37.7% in the first week of April, up from a record low in the second half of March. Only 5% of businesses surveyed see adding employees in the next 3 months. Less than one-tenth say their business is in a good state, and 63% of businesses say they have to cut full-time staff.
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IMF: Canadian GDP To Make Biggest Contraction Since The Great Depression
The IMF is forecasting Canada’s gross domestic product (GDP) will make the biggest contraction since the Great Depression. Canada’s real GDP will contract 6.2% in 2020. This is down 8 points from the 1.8% growth forecasted as recently as January. The decline is a little larger than the average for advanced economies. It’s also about twice the size of contraction Canada saw during the Great Recession.
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Canadian Real Estate Buyers Ignored Pandemic Warnings, Until Ordered To Stay Home
Canadian real estate buyers were surprisingly enthusiastic to buy homes into the pandemic. There were 43,317 unadjusted sales in March, up 7.85% from last year. The increase is partially due to last year’s weak numbers, helping last month look very large. In a longer context, it was still one of the slowest Marches on record… but still surprisingly busy considering a pandemic was declared after the first week of the month.
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Canada’s Household Borrowing Rate Is Dropping 4x Faster Than During The Great Recession
Borrowing rates are falling at one of the fastest paces – even faster than the Great Recession. Households were paying an effective interest rate of 3.13% on April 10, down 19.74% from last year. This is the lowest level since July 2017, but also one of the fastest drops in history. The rate of decline is almost 4x the size of the one made during the Great Recession during this period.
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