Canadian Personal Finance Blog

Archive for the ‘GDP’ Category

NFB is launching a new web expose on the economy at the Micro level (i.e. your and my level) and what the macro changes do at the Micro level, it is called GDP , and looks to be an interesting project to watch, official web site.

The August Bank Holiday in Ontario is becoming more of a non-entity every year. This year all stores seem to be open, the only things that are closed are Banks and Government offices, which should help stimulate the economy a little (I suppose). I did my part to stimulate the economy by purchasing a new TV to replace the 1987 genre one my kids watched (which they claim wouldn’t show channels 2-13, but what is on those channels anyhow?), but whether this is helpful to the economy we can only hope.

GDP Continues to Decrease

Stats Canada came out with data on the Canadian GDP in May on Friday and it seems it is the world of manufacturing that is causing the largest drag to the GDP, whereas the services sector remains relatively constant. This statement itself is no big surprise, given the Auto sector is in deep trouble and all the associated companies are suffering along with the big car makers.

GDP Down again for May

The energy and manufacturing sectors were the main contributors to May’s decline. Construction and wholesale trade also decreased. Conversely, the activities of real estate agents and brokers as well as retail trade advanced in the month.

Not horrible news, but things need to start picking up soon.

Now that the largest bankruptcy in history has occurred, it begs the question, is there a bottom here somewhere? I think there is for now, but it does point out that “sure things” should sometimes be questioned. If someone had told a trader or investor that GM and Nortel would be in bankruptcy protection, 10 years ago, that person would have been laughed off as a “nut” or “crack pot” or worse, and now we have seen this happen.

Thanks to all of this the Canadian Government is pouring money into GM, with little hope of recuperating this money or of it making a huge difference. We are in uncharted waters that is for sure, I have little understanding of where this all might lead, and I am pretty sure that I am not the only one with these thoughts.

Stay tuned this could be some very interesting times ahead.

GDP Down, down, down…

Canada’s GDP is down 1.4% in the first quarter of 2009 which is the worst drop since 1991, another bad omen for the economy. 

Lower spending in Canada and the United States, particularly business investment in plant and equipment, led to a sharp decline in Canada’s exports and imports. Business investment in Canada fell at the fastest rate since 1982. Final domestic demand was down 1.5% as personal spending, particularly on durable goods, continued to decline. Corporate and personal income also fell in the quarter.

It is not a surprise that GDP is down, but the size of the drop is concerning, but if Canadians are dropping their spending that might be a good thing in some ways.

GDP Looks Not So Good

Companies and individuals in Canada also had the problem of their purchasing power dropping off steeply as well:

Real gross domestic income (GDI), a measure of Canada’s purchasing power, fell 3.0% in the first quarter (-6.2% year over year). Canada’s terms of trade, a measure of export prices relative to import prices, deteriorated for the third consecutive quarter as commodity prices fell and the Canadian dollar depreciated relative to its US counterpart. As a result, the decline in real GDI was much sharper than real GDP; the third consecutive quarter this has occurred.

Less money to spend, less money being spend, and less purchasing power, not a recipe for a way to spend our way out of this economic downturn (read apocalypse).

Ho hum, guess we all took a break between March and April but the Economic Activity indicators from Stats Canada caught us, and now we know we didn’t do anything more in that time!

Wholesale trade and slower oil and gas sales are the culprits, but still interesting to see that things are not as hot as they were. Will this stop the Bank of Canada in their interest rate hike fervor? Don’t think so, sorry folks.

The table at the end of the Stats Canada posting outlines nicely what industries are still powering ahead in the economy.

On the investing side of things, if you held RIM about a year ago and decided to not look until now, that was a good piece of financial thinking, because the Technology Titan is now at $220 Cdn up from $72 a year ago (yup, tripling your money). Did I buy any? Nope, I am confident enough in my own ineptitude to say I didn’t, hope some of you did, and remember to TAKE YOUR PROFITS!

OK so the increase is only 0.1% from last month by our friends at Stats Canada, and 2.0% year over year and remember up is better than down! The Energy industry continues to help the Canadian economy hum along nicely, which lines up with our position in this world (natural resource provider to the world). Is this a good thing? Maybe, it’s better to be a “have” in this situation, however, what will happen when the “have not” countries can’t pay for it? Just an opinion and concept I am looking into.On my tax front, I received my tax rebates from the CCRA, which is great and no complaints from them about my return, and my RRSP limit continues to remain quite large (I keep thinking that I am driving it down, thanks to a large Pension Adjustment, but that is not the case). Nice to have that found money, but I am using it to pay down debt right now!

Good response to my help me make my blog better posting, which is great. As you can see there are some small changes already made on the site, and more is coming. Remember feedback in comments on this kind of stuff is ok by me, I may not take the advice, but I always appreciate feedback.

Zen and the Art of Financial Planning is mentioned by No Credit Needed in the Carnival of Personal Finance #94, as well!