|By PR Newswire||
|December 19, 2012 07:16 AM EST||
Bank drops GDP growth forecast three-tenths to 1.7% but sees pick-up in 2014
TORONTO, Dec. 19, 2012 /CNW/ - Without key domestic economic drivers to shelter Canada from a continued weak global economy, GDP growth will slip to a very mediocre 1.7 per cent in 2013, finds CIBC's latest Canadian economic forecast.
"Having earlier tapped fiscal stimulus and a housing boom to shelter the economy from sluggishness abroad, the country's ability to set its own course is now much more limited," says Avery Shenfeld, chief economist at CIBC. "Escaping economic mediocrity will depend on the kindness of strangers, with exports and related capital spending critical to Canada's fate in 2013-14."
Mr. Shenfeld says that the global economy continues to face significant headwinds and as a result he has cut his global outlook for 2013 by two-tenths to three per cent. "It's too early to get the full benefits of policy stimulus in Asia, Europe is too stubborn to soften its fiscal drag enough and amplify ECB bond purchases, and Washington is too wedded to getting going on fiscal tightening stateside, if not the full fiscal cliff."
He adds that while Chinese GDP could show improvement towards an eight per cent pace as early as Q4 of 2012, it is not likely to have much of an impact on other economies as Chinese imports are currently showing no growth at all on a year-over-year basis. As such, he expects there to be a delay before crude oil and other resources rebound in price.
"The absence of a helping hand from abroad will leave Canada exposed," says Mr. Shenfeld. "Blaming temporary disruptions in energy production in Q3 for recent disappointments misses the point: GDP excluding resource extraction has also been decelerating, the loss of home building momentum will offset greater oil output.
"Our downgraded 1.7 per cent growth forecast for 2013 will trail the U.S. pace and is three ticks slower than our last projection. Household debt burdens are keeping consumption bounded by the moderate growth pace for real incomes. Governments also face leaner-than-expected coffers due to downward revisions to nominal GDP expectations, and will be introducing further spending restraints or tax hikes for fiscal 2013."
The report notes that in the near term, this environment will see investors maintain a risk-adverse attitude and see further downward adjustments to corporate earnings expectations. Assets tied to global growth, including commodities and the most cyclical equities, could be flat or see some first half slippage. This will exert near-term downward pressure on the loonie. Equities with less cyclical earnings profiles and well-backed dividends, as well as investment grade corporate bonds, will remain in favour for the next couple of quarters.
Optimism for 2014
"Diamonds are forever, but weak economic growth need not be," adds Mr. Shenfeld. "With its household sector healing, the U.S. should be positioned to lead the way towards a better year come 2014 if, as we expect, new fiscal tightening measures do not hit as deeply that year. Don't underestimate the importance of the upswing underway in housing. As it gathers steam, it will drive related consumer spending ("new living room, new couch") and renovation ("those cabinets have to go"), in addition to actual home-building jobs."
He also expects by 2014 that China will be feeling the full benefit of its own policy easing and the improvement in U.S.-bound exports. Even Europe, if it finally recognizes the need for both a softer hand in fiscal tightening and a more aggressive central bank, might at least register positive growth at that point.
"These developments will propel 2014 exports and resource sector capital spending in Canada, finally delivering the 2½% quarterly growth rates that the Bank of Canada has been expecting, or hoping for, in the past two years," adds Mr. Shenfeld.
"The brighter news on that front, coupled with conservative starting valuations for equities, leaves room for a "risk on" rally in the coming summer and autumn. It's too far out to act on just yet, but by mid-2013, it should be time to shift portfolios into cyclical equities and industrial commodities to take advantage of that likely turn in sentiment."
He believes interest rates will hold steady in Canada through 2013 but that Governor Mark Carney's successor will nudge rates up 50-75 basis points in 2014.
The complete CIBC World Markets report is available at: http://research.cibcwm.com/economic_public/download/fdec12.pdf.
CIBC's wholesale banking business provides a range of integrated credit and capital markets products, investment banking, and merchant banking to clients in key financial markets in North America and around the world. We provide innovative capital solutions and advisory expertise across a wide range of industries as well as top-ranked research for our corporate, government and institutional clients.
SOURCE CIBC World Markets
"We've just seen a huge influx of new partners coming into our ecosystem, and partners building unique offerings on top of our API set," explained Seth Bostock, Chief Executive Officer at IndependenceIT, in this SYS-CON.tv interview at 16th Cloud Expo, held June 9-11, 2015, at the Javits Center in New York City.
Aug. 2, 2015 10:00 PM EDT Reads: 678
Mobile, social, Big Data, and cloud have fundamentally changed the way we live. “Anytime, anywhere” access to data and information is no longer a luxury; it’s a requirement, in both our personal and professional lives. For IT organizations, this means pressure has never been greater to deliver meaningful services to the business and customers.
Aug. 2, 2015 07:15 PM EDT Reads: 219
Digital Transformation is the ultimate goal of cloud computing and related initiatives. The phrase is certainly not a precise one, and as subject to hand-waving and distortion as any high-falutin' terminology in the world of information technology. Yet it is an excellent choice of words to describe what enterprise IT—and by extension, organizations in general—should be working to achieve. Digital Transformation means: handling all the data types being found and created in the organizat...
Aug. 2, 2015 06:00 PM EDT Reads: 1,127
SYS-CON Events announced today that HPM Networks will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. For 20 years, HPM Networks has been integrating technology solutions that solve complex business challenges. HPM Networks has designed solutions for both SMB and enterprise customers throughout the San Francisco Bay Area.
Aug. 2, 2015 05:45 PM EDT Reads: 509
Chuck Piluso presented a study of cloud adoption trends and the power and flexibility of IBM Power and Pureflex cloud solutions. Prior to Secure Infrastructure and Services, Mr. Piluso founded North American Telecommunication Corporation, a facilities-based Competitive Local Exchange Carrier licensed by the Public Service Commission in 10 states, serving as the company's chairman and president from 1997 to 2000. Between 1990 and 1997, Mr. Piluso served as chairman & founder of International Te...
Aug. 2, 2015 04:00 PM EDT Reads: 422
The Software Defined Data Center (SDDC), which enables organizations to seamlessly run in a hybrid cloud model (public + private cloud), is here to stay. IDC estimates that the software-defined networking market will be valued at $3.7 billion by 2016. Security is a key component and benefit of the SDDC, and offers an opportunity to build security 'from the ground up' and weave it into the environment from day one. In his session at 16th Cloud Expo, Reuven Harrison, CTO and Co-Founder of Tufin,...
Aug. 2, 2015 03:00 PM EDT Reads: 546
Container technology is sending shock waves through the world of cloud computing. Heralded as the 'next big thing,' containers provide software owners a consistent way to package their software and dependencies while infrastructure operators benefit from a standard way to deploy and run them. Containers present new challenges for tracking usage due to their dynamic nature. They can also be deployed to bare metal, virtual machines and various cloud platforms. How do software owners track the usag...
Aug. 2, 2015 02:00 PM EDT Reads: 251
SYS-CON Events announced today that MobiDev, a software development company, will exhibit at the 17th International Cloud Expo®, which will take place November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. MobiDev is a software development company with representative offices in Atlanta (US), Sheffield (UK) and Würzburg (Germany); and development centers in Ukraine. Since 2009 it has grown from a small group of passionate engineers and business managers to a full-scale mobi...
Aug. 2, 2015 12:00 PM EDT Reads: 346
With SaaS use rampant across organizations, how can IT departments track company data and maintain security? More and more departments are commissioning their own solutions and bypassing IT. A cloud environment is amorphous and powerful, allowing you to set up solutions for all of your user needs: document sharing and collaboration, mobile access, e-mail, even industry-specific applications. In his session at 16th Cloud Expo, Shawn Mills, President and a founder of Green House Data, discussed h...
Aug. 2, 2015 11:45 AM EDT Reads: 480
For IoT to grow as quickly as analyst firms’ project, a lot is going to fall on developers to quickly bring applications to market. But the lack of a standard development platform threatens to slow growth and make application development more time consuming and costly, much like we’ve seen in the mobile space. In his session at @ThingsExpo, Mike Weiner, Product Manager of the Omega DevCloud with KORE Telematics Inc., discussed the evolving requirements for developers as IoT matures and conducte...
Aug. 2, 2015 11:15 AM EDT Reads: 354
There are many considerations when moving applications from on-premise to cloud. It is critical to understand the benefits and also challenges of this migration. A successful migration will result in lower Total Cost of Ownership, yet offer the same or higher level of robustness. In his session at 15th Cloud Expo, Michael Meiner, an Engineering Director at Oracle, Corporation, analyzed a range of cloud offerings (IaaS, PaaS, SaaS) and discussed the benefits/challenges of migrating to each offe...
Aug. 2, 2015 11:00 AM EDT Reads: 175
One of the hottest areas in cloud right now is DRaaS and related offerings. In his session at 16th Cloud Expo, Dale Levesque, Disaster Recovery Product Manager with Windstream's Cloud and Data Center Marketing team, will discuss the benefits of the cloud model, which far outweigh the traditional approach, and how enterprises need to ensure that their needs are properly being met.
Aug. 2, 2015 09:00 AM EDT Reads: 1,698
In their session at 17th Cloud Expo, Hal Schwartz, CEO of Secure Infrastructure & Services (SIAS), and Chuck Paolillo, CTO of Secure Infrastructure & Services (SIAS), provide a study of cloud adoption trends and the power and flexibility of IBM Power and Pureflex cloud solutions. In his role as CEO of Secure Infrastructure & Services (SIAS), Hal Schwartz provides leadership and direction for the company.
Aug. 2, 2015 08:15 AM EDT Reads: 184
In a recent research, analyst firm IDC found that the average cost of a critical application failure is $500,000 to $1 million per hour and the average total cost of unplanned application downtime is $1.25 billion to $2.5 billion per year for Fortune 1000 companies. In addition to the findings on the cost of the downtime, the research also highlighted best practices for development, testing, application support, infrastructure, and operations teams.
Aug. 2, 2015 07:00 AM EDT Reads: 183
The Internet of Everything (IoE) brings together people, process, data and things to make networked connections more relevant and valuable than ever before – transforming information into knowledge and knowledge into wisdom. IoE creates new capabilities, richer experiences, and unprecedented opportunities to improve business and government operations, decision making and mission support capabilities.
Aug. 1, 2015 10:00 AM EDT Reads: 338