Winter sent economy into deep freeze
It’s not just the weather that’s been frosty.
Canada’s economic growth has been in the deep freeze this winter amid repeated lashings of ice and snow.
The Greater Toronto Area suffered through the worst winter in two decades, according to Environment Canada. The severe weather shut airports, slowed truck deliveries, stalled construction and kept consumers at home.
It was also blamed for slower job creation, higher heating bills and rising insurance premiums.
And it’s not over yet.
Environment Canada predicts a colder than normal April. While it will feel warmer because the sun is higher and the days are longer, temperatures will be below average, meteorologist Geoff Coulson said.
“I wish I had better news,” Coulson said.
While the season is technically almost behind us — March 20 is the official start of spring — Canada is still reeling from its impact, economists say.
“Prolonged bouts of cold and significant levels of precipitation have, and are continuing to have, a material impact on output growth,” Scotiabank’s deputy chief economist Aron Gampel wrote in a research note.
Canada’s economy is expected to grow just 0.5 per cent in the first three months of this year, a quarterly report by the Organization for Economic Co-Operation and Development predicted earlier this month.
That’s the lowest growth rate of any G7 country.
The U.S. economy will fare a bit better, rising 1.7 per cent, the OECD predicted, while the G7 is expected to gain 2.2 per cent, mainly on the strength of faster growth in Japan, Germany and the U.K.
And more lies ahead.
“The United States and Canada are both also expected to experience an uneven pattern of growth in the near term, owing in part to the disruptive effect of repeated episodes of severe winter weather,” the think-tank said.
The impact has varied across economic sectors.
Many retailers, tourist operators and restaurants suffered as consumers “preferred to hibernate instead of venturing out,” Gampel noted.
After a scorching finish to 2013, vehicle sales slowed in January and February both in Canada and the U.S., which imports much of Canada’s auto assembly production.
Insurance companies were hit hard. They paid out a record $3.2 billion in claims last year, and while much of that was due to the severe flooding that hit southern Alberta last June, the ice storm that struck Ontario just before Christmas added $200 million to the burden, the Insurance Bureau of Canada said.
Unemployment remained stuck at 7 per cent in January and February as businesses that faced repeated production and logistical problems may have delayed hiring plans, economists said.
Manufacturing sales fell 0.9 per cent in December, on lower demand for vehicles and aerospace, according to Statistics Canada. In January, manufacturing sales resumed their upward trend, rising 1.5 per cent, on higher sales of primary metals and food.
Severe weather this winter has affected much of the globe, including the southern hemisphere, where heat has been the issue. Drought-like conditions in California, Argentina and Australia threaten livestock and crop production.
Winter sent economy into deep freeze
It’s not just the weather that’s been frosty.
Canada’s economic growth has been in the deep freeze this winter amid repeated lashings of ice and snow.
The Greater Toronto Area suffered through the worst winter in two decades, according to Environment Canada. The severe weather shut airports, slowed truck deliveries, stalled construction and kept consumers at home.
It was also blamed for slower job creation, higher heating bills and rising insurance premiums.
And it’s not over yet.
Environment Canada predicts a colder than normal April. While it will feel warmer because the sun is higher and the days are longer, temperatures will be below average, meteorologist Geoff Coulson said.
“I wish I had better news,” Coulson said.
While the season is technically almost behind us — March 20 is the official start of spring — Canada is still reeling from its impact, economists say.
“Prolonged bouts of cold and significant levels of precipitation have, and are continuing to have, a material impact on output growth,” Scotiabank’s deputy chief economist Aron Gampel wrote in a research note.
Canada’s economy is expected to grow just 0.5 per cent in the first three months of this year, a quarterly report by the Organization for Economic Co-Operation and Development predicted earlier this month.
That’s the lowest growth rate of any G7 country.
The U.S. economy will fare a bit better, rising 1.7 per cent, the OECD predicted, while the G7 is expected to gain 2.2 per cent, mainly on the strength of faster growth in Japan, Germany and the U.K.
And more lies ahead.
“The United States and Canada are both also expected to experience an uneven pattern of growth in the near term, owing in part to the disruptive effect of repeated episodes of severe winter weather,” the think-tank said.
The impact has varied across economic sectors.
Many retailers, tourist operators and restaurants suffered as consumers “preferred to hibernate instead of venturing out,” Gampel noted.
After a scorching finish to 2013, vehicle sales slowed in January and February both in Canada and the U.S., which imports much of Canada’s auto assembly production.
Insurance companies were hit hard. They paid out a record $3.2 billion in claims last year, and while much of that was due to the severe flooding that hit southern Alberta last June, the ice storm that struck Ontario just before Christmas added $200 million to the burden, the Insurance Bureau of Canada said.
Unemployment remained stuck at 7 per cent in January and February as businesses that faced repeated production and logistical problems may have delayed hiring plans, economists said.
Manufacturing sales fell 0.9 per cent in December, on lower demand for vehicles and aerospace, according to Statistics Canada. In January, manufacturing sales resumed their upward trend, rising 1.5 per cent, on higher sales of primary metals and food.
Severe weather this winter has affected much of the globe, including the southern hemisphere, where heat has been the issue. Drought-like conditions in California, Argentina and Australia threaten livestock and crop production.
Winter sent economy into deep freeze
