Canwest News Service
Housing and trade are two of the main issues Canadians can look to this week for clues concerning the health of the Canadian economy.
Today, Canada Mortgage and Housing Corp. is due to report housing starts for December. The median forecast among economists is for an annual rate of 161,800 units being built last month. That would be a slight increase over November's rate of 158,500 and be the highest level since December 2008. If expectations are right, it would put 2009 housing starts overall at about 143,600, marking the first time in eight years the number has been less than 200,000.
Statistics Canada is due to report these building starts figures for November, also today.
Millan Mulraine, economics strategist for TD Securities, is calling for a housing-start rate of 160,000 in December, and added that it would have been more if not for colder weather than usual last month.
"Most of the gains are likely to be in single-family unit construction, while the more volatile multi-family segment is also expected to advance," Mulraine wrote in a research note.
On Tuesday, Canada's merchandise trade data for November is due. In recent months, the balance has stayed relatively close to even with a surplus of $428 million in October. That followed three straight months of deficits. Up until December 2008, Canada had not seen a monthly trade deficit in more than 30 years. The median estimate among economists is that Canada's trade surplus grew to $700 million in November.
Canada's trade surplus will likely have fallen to about$100 million. That should come as a result of imports rising more than exports, both gaining ground on improving domestic and international economic conditions.
Canada's export and import levels are likely to stay relatively close to each other for the next few years as factors such as improving economies around the globe and a rising Canadian dollar cancel each other out in terms of their effect on trade. "In the months ahead, with the strong Canadian dollar continuing to wreak havoc on the export-based Canadian economy, we expect net trade to be relatively unsupportive to overall economic activity," he said.
Some of the other key reports on the Canadian economy in the coming week will be the Bank of Canada's quarterly business-outlook survey today, the new-housing price index on Tuesday, and new motor-vehicle sales on Friday.
