20240429 Calibre April 2024 Investor Presentation.pdf
Economic and Financial Outlook - Leslie Preston - TD Economist
1. THE ECONOMIC AND FINANCIAL OUTLOOK
Leslie Preston
Economist
TD Economics
October 2014
2. GLOBAL ECONOMY STRUGGLING TO
ACCELERATE
6
5
4
3
2
1
0
-1
World GDP growth, Y/Y % Chg.
2002 2004 2006 2008 2010 2012 2014 2016
Source: IMF. Forecast by TD Economics as at September 2014.
Forecast
3. DEEPLY VARIED REGIONAL PERFORMANCES
8
7
6
5
4
3
2
1
0
-1
Real GDP growth, Y/Y % Chg.
U.S. Japan Eurozone China Emerging Mkts
ex-China
2013 2014 2015
Source: TD Economics.
Forecast by TD Economics as of June 2014.
4. CHINA'S ECONOMY REBALANCING
80%
70%
60%
50%
40%
30%
20%
10%
0%
-10%
Share of Nominal GDP, %
Private Consumption Government
Consumption
China U.S. Germany
Total Investment Net Exports
Source: China National Bureau of Statistics, Bureau of Economic Analysis. 2013 Data.
5. U.S. REBOUNDS AFTER FROZEN START
5
4
3
2
1
0
-1
-2
-3
Real GDP, annualized quarter/quarter % change
2010 2011 2012 2013 2014 2015
Last data point Q2, 2014. Forecast by TD Economics as of September 2014.
Source: Bureau of Economic Analysis.
Forecast
Forecast Y/Y % Chg.
(Q4/Q4 % growth)
2014F: 2.2% (2.0)
2015F: 3.0% (2.8)
2016F: 2.7% (2.6)
6. DIMINISHED FISCAL DRAG AND STRONGER
HOUSING RECOVERY TO SUPPORT GROWTH
4
3
2
1
0
-1
-2
-3
-4
-5
Contribution to real GDP growth; percent
Final Domestic Demand
Net Exports
Inventory investment
Real GDP
2008 2009 2010 2011 2012 2013 2014F 2015F 2016F
Source: BEA, Forecast by TD Economics as of September 2014
8. U.S. DOLLAR ENJOYING A RESURGENCE
130
120
110
100
90
80
70
60
0.85
0.80
0.75
0.70
0.65
0.60
0.55
0.50
EUR per USD JPY per USD
Euro (LHS)
Japanese Yen (RHS)
2006 2008 2010 2012 2014 2016
Source: Haver Analytics. Forecast by TD Economics as at September 2014.
Forecast
9. LITTLE UPSIDE FOR THE CANADIAN DOLLAR
1.10
1.00
0.90
0.80
0.70
US$/C$
Forecast
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Source: Bank of Canada. Forecast by TD Economics as at September 2014.
10. RELATIVELY FLAT OUTLOOK FOR COMMODITIES
140
130
120
110
100
90
80
70
60
50
40
500
450
400
350
300
250
200
150
100
50
Overall TDCI* (LHS)
Oil-WTI (RHS)
2006 2008 2010 2012 2014F 2016F
*Index of 18 Canadian resource commodity prices in US$. Forecast as at September 2014.
Forecast
TD Commodity Price Index (Q1, 2002 =100)
US$/Barrel
11. CANADIAN AND U.S. GDP GROWTH RATES
TEND TO MOVE TOGETHER
8
6
4
2
0
-2
-4
Canada
USA
Real GDP, Y/Y % Chg.*
1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015
Source:Haver Analytics, Statistics Canada. Forecast by TD Economics as at September 2014.
*Canada: 2007 Chained dollars. United States: 2009 Chained dollars.
Fcst.
Historical Corr. Coeff. = 0.86
12. COUNTING ON STRONGER EXPORTS
10
5
0
-5
-10
-15
-20
Real Goods Exports
Crude oil production
Y/Y % Chg.
2009 2010 2011 2012 2013 2014 2015 2016
Source: Statistics Canada. Forecast by TD Economics as at September 2014.
Forecast
13. CONSUMERS PROVIDE SOLID BASE
4
3
2
1
0
Y/Y % Chg., Real expenditure on goods and services
Forecast
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Source: Statistics Canada, Haver Analytics. Forecast by TD Economics as of September 2014.
14. DEBT-TO-INCOME RATIO HAS STABILIZED
14
12
10
8
6
4
2
0
180
160
140
120
100
80
60
40
20
0
% Y/Y % Chg.
Household Debt-to-Income Ratio (lhs)
Household Debt Growth (rhs)
1991 1995 1999 2003 2007 2011 2015
Source: Statistics Canada. Forecast by TD Economics as of September 2014.
Fcst*
15. HOUSING MARKET HAS PROVED
RESILIENT, BUT PRICE GAINS SET TO
SLOW
25
20
15
10
5
0
-5
-10
-15
Forecast
Y/Y % Chg., Average existing home prices
2004 2006 2008 2010 2012 2014 2016
Source: Canadian Real Estate Association. Forecast by TD Economics as at October 2014.
16. INFLATION OUTLOOK NON-THREATENING
4
3
2
1
0
-1
-2
Consumer Price Index, Y/Y % Chg.
CPI (Total)
Core CPI
Forecast
2006 2007 2008 2009 2011 2012 2013 2014 2016
Source: Haver Analytics. Forecast by TD Economics as at September 2014.
17. INTEREST RATES TO REMAIN LOW
7
6
5
4
3
2
1
0
US Federal Funds Target Rate
Bank of Canada Overnight Rate
%
2000 2002 2004 2006 2008 2010 2012 2014 2016
Source: Bank of Canada/Haver Analytics. Forecast by TD Economics as of September 2014.
Forecast
18. BOND YIELDS TO RISE, BUT REMAIN WELL
BELOW NORMAL
6
5
4
3
2
1
0
%, Yield on Canadian Bonds
overnight
target
Current 2015 2018
3-month 2-year 5-year 10-year 30-year
Source: Bloomberg, TD Economics. As at October 6, 2014.
19. SOME CONVERGENCE IN PROVINCIAL GROWTH
Real GDP growth, Y/Y % Chg.
0.0 1.0 2.0 3.0 4.0 5.0 6.0
Alberta
Canada
B.C.
Ontario
Manitoba
Québec
Sask.
Atlantic
2013E 2014-15F
E,F: Estimate, Forecast by TD Economics as of September 2014.
20. ONTARIO JOB MARKET TO SHOW SOME
IMPROVEMENT
Unemployment rate, % Employment growth, %
2.5
2.0
1.5
1.0
0.5
0.0
-0.5
-1.0
-1.5
-2.0
-2.5
-3.0
10.0
9.5
9.0
8.5
8.0
7.5
7.0
6.5
6.0
5.5
5.0
Employment (right axis)
Unemployment Rate (left axis)
2006 2007 2008 2009 2010 2011 2012 2013 2014F 2015F
Source: Haver Analytics. Forecast by TD Economics as at September 2014.
21. ONTARIO ENJOYS GOOD OVERALL DEMOGRAPHICS
0.6
-2 0 2 4 6 8 10
Toronto
Ottawa-Gat.
Oshawa
Kitchener
Kingston
Hamilton
London
Peterborough
Grtr. Sudbury
Welland
St. Cath. - Niag.
Thunder Bay
Windsor
Source: Statistics Canada, 2011 Census. *Over 2006-11 period.
P
%, Population growth*
22. BUT ITS ECONOMIC MODEL HAS CHANGED
150
140
130
120
110
100
90
80
70
60
Public Sector
Other Goods and
Services
Manufacturing
Empoyment by Industry, Index 2002 = 100 (Ontario)
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Source: Statistics Canada and Haver Analytics. As at Q3, 2014.
23. EXPORT ORIENTED INDUSTRIES TO LEAD PACK
Ontario real GDP growth, Y/Y % Chg., by selected industries, (2014-15 Avg.)
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5
Transport & Ware.
Wholesale
Manufacturing
Primary
Accomm. & Food
Retail
Total
Public Services
Construction
Forecast by TD Economics as at September 2014.
24. ONTARIO GOVERNMENT STILL FACING BIG
DEFICITS
Ontario Net Debt to GDP ratio
45
40
35
30
25
20
15
10
5
0
Ontario Budgetary Balance as a % of GDP
0.5
0.0
-0.5
-1.0
-1.5
-2.0
-2.5
-3.0
-3.5
Balance to GDP (LHS)
Net Debt to GDP (RHS)
07-08 08-09 09-10 10-11 11-12 12-13 13-14e* 14-15f 15-16f 16-17f 17-18f
*Expected. Source: Ontario Ministry of Finance, 2014 Budget.
Forecast
25. THE REGION AT A GLANCE
INDICATORS Welland
St. Catharines-
Niagara
Canada
Population 52,585 407,878 34,931,599
Average Growth over 2006-11 0.60% 0.50% 5.90%
% of population 65+ 17.9% 18.9% 14.8%
Average Household Income $66,946 $74,367 $85,792
Participation Rate 62.4% 63.8% 66.7%
% of pop. 25+ with more than a HS degree 47.3% 51.0% 56.6%
Source: FP Markets, July 1st, 2012 estimate.
26. UNEMPLOYMENT RATE TO TRAIL PROVINCIAL
TREND
12
10
8
6
4
Canada Ontario St. Cath-Niagara*
1997 1999 2001 2003 2005 2007 2009 2011 2013 2015
Source: Canada Census, Haver Analytics. Forecast by TD Economics as at October 2014.
* 2014 figure is year-to-date average.
Forecast
Unemployment rate, %
27. WELLAND'S LARGEST EMPLOYERS GAINED
MORE THAN 100 JOBS OVER THE PAST YEAR
Number of employees
0 200 400 600 800 1,000 1,200 1,400
Canadian Tire Financial Services
Niagara Health System – Welland Hospital Site
District School Board of Niagara
Niagara College Canada
Convergys CMG Canada Ltd. Partnership
Corporation of the City of Welland
Niagara Catholic District School Board
Bosch Rexroth
Zehr’s
Wal-Mart Canada
PowerBlades
McDonald’s Restaurant
E.D. Products Ltd.
Vesuvius Canada Inc.
Welded Tube Canada
2014
2013
Source: City of Welland, Business Directory.
28. ST. CATHERINE'S & DISTRICT HOUSING
PERFORMANCE
Resale Activity (Units)
3,400
3,200
3,000
2,800
2,600
2,400
2,200
2,000
Average Residential Price ($)
280,000
270,000
260,000
250,000
240,000
230,000
220,000
210,000
200,000
190,000
180,000
Average Residential Price Unit Sales
Fcst.
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Source: Canadian Real Estate Association. Forecast by TD Economics as at October 2014.
29. DOWNSIDE RISKS TO THE OUTLOOK
Geopolitical developments intensify
China's economic rebalancing hits major turbulence
Economic stagnation in Europe and Japan
Renewed market volatility as Fed normalizes policy
UPSIDE RISKS TO THE OUTLOOK
U.S. economy could gain more traction
QE in Europe and Japan could surprise
30. www.td.com/economics
@CraigA_TD
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