FEATURED ARTICLE: Insurer diverting from condo sector MARKET STATISTICS: Weekly Change
ECONOMIC STATISTICS:
U.S. Employment Report – March Non-farm payrolls rose just 126k in March, significantly below expectations of 245k. Private sector hiring expanded only 129k; the consensus call was for 235k. Meanwhile, government payrolls fell by 3k. The unemployment rate was unchanged at 5.5%., on par with median survey estimate. Household survey unemployment rose just 36k in the month, while the labour force fell by 96k. The labour force participation rate fell by 0.1 percentage points to 62.7% of working age adults. Good-producing employment fell 13k; unsurprisingly, losses were concentrated in mining which fell a whopping 11k in the month. This report was bound to happen. Job growth has been running at a stupendous pace in America over the last several months, increasingly out of tune with other economic indicators, which have pointed to a slowdown. The reckoning in March closes at least some of this gap.
Canadian Real GDP at Basic Prices – January The Canadian economy contracted 0.1% in January, better than the consensus estimate. Good-sectors had a surprisingly strong showing, up 0.3%. Ironically, some of the strength came from the mining, oil & gas which jumped 1.4%. Conventional oil production, which is likely sensitive to price declines, dropped 1.9%. Utilities (+1.4%), and agriculture (+1.9%) were nicely higher, while construction (-0.4%) and manufacturing (-0.7%) were hit hard. Additionally, services sector shrank 0.3%, while wholesale (-2.6%) and retail trading (-1%) experienced huge declines. There’s no denying that the Canadian economy had a poor start to 2015, but the drop in GDP wasn’t nearly as bad as some feared.
U.S. Personal Income and Consumption – February U.S. personal spending disappointed in February, rising only slightly and declining 0.1% in real terms. Frigid temperatures no doubt took a toll, but the extended softness in the past three months suggest consumers have lost some pep. There was widespread weakness across the three major categories in real terms, amid a decline in durables (autos), flat nondurables, and slower services. While real spending is still up 3.0% in the past year, the three-month annualized gain is only 0.8%. Blame the weather partly or just a pause that refreshes, but American consumers are off to a cooler start this year. A rebound is expected though, provided employment and income growth remain solid.
Rising claims for water damage in condo buildings and inadequate regulation have led insurance companies to refuse new clients or demand higher premiums for coverage, adding concerns about quality in Canada’s fastest-growing house segment. In March, Aviva Insurance Company of Canada stopped taking on new business from condo corporations in Quebec, citing rising claims and weak legislation that allows owners to set aside insufficient amounts to cover repairs and maintenances. Other insurance companies are also becoming more restrictive about which condo corporations they will service, and the cost of coverage is rising. Ontario and Quebec are expected to introduce new legislation over the next few months to reform outdated provincial condo laws that critics say do not go far enough to prevent quality problems as condo buildings age. For now though, cases of shoddy construction in Canada’s largest city, Toronto, have led to lawsuits and high repair costs for problems such as water leaks, while premium and insurance deductibles are expected to grow further.
U.S. Consumer Credit – February - Tuesday, April 7, 2015 at 3:00pm
Canadian Building Permits – February - Thursday, April 9, 2015 at 8:30am
Canadian New Housing Price Index – February - Thursday, April 9, 2015 at 8:30am
United States Wholesale Trade – February - Thursday, April 9, 2015 at 10:00am
Canadian Housing Starts – March - Friday, April 10, 2015 at 8:15am
Canadian Employment Report – March - Friday, April 10, 2015 at 8:30am
Tuesday, April 7, 2015 at 1:30pm - Sector Meetings
Thursday, April 9, 2015 at 3:30pm - Team-Wide Meeting