Recycling Product News Logo

Canadian economy to remain sluggish through 2016, but no recession

Canadian economy to remain sluggish through 2016, but no recession

The Conference Board of Canada is downgrading its 2016 growth forecast for Canada as the economy continues to suffer from the further deterioration in oil prices. The Conference Board's Canadian Outlook: Winter 2016 estimates that the economy grew by 1.2 per cent in 2015 and is forecast to grow by just 1.7 per cent in 2016.

"Although much of the recent weakness was contained to the energy sector, other areas of the economy, such as household spending, exports and manufacturing have failed to pick up the slack," said Matthew Stewart, Associate Director, National Forecast. "Stronger economic growth will not happen until next year when a recovery in the non-energy sector is finally expected to take hold."


  • The Canadian economy will remain sluggish through 2016, with expected growth of 1.7 per cent.
  • With oil supply expected to outpace demand this year and next, oil prices will likely remain below US$50 a barrel until the end of 2017.
  • Business investment will see a third consecutive year of decline, led by large cuts in the energy sector.

World oil prices are expected to increase from their January average of under US$30 per barrel, mainly because of cuts in U.S. production expected this year. However, with inventories continuing to rise, world oil prices are not forecast to exceed $40 this year. Given the persistently low prices, oil firms are expected to cut their real capital spending budgets by 16 per cent in 2016 following a 24 per cent reduction last year.

However, falling business investment will not be contained to the energy sector. Building construction is expected to decline this year due to sluggish demand and rising vacancy rates. At the same time, machinery and equipment spending has been hampered by weak business confidence, sluggish global growth and the impact of a weak loonie on businesses' ability to purchase foreign machinery. In all, real business investment is expected to fall by 2.4 per cent in 2016.

Consumer spending has been one of the main drivers of economic growth over the last several years. However, faced with another year of weak employment and disposable income gains, combined with record high debt levels, Canadians will be hard pressed to open their wallets further in 2016. Overall, real consumer spending is expected to rise by 1.9 per cent this year.

Following a disappointing 2015, high hopes continue to be placed on the trade sector to fuel Canada's economy. Despite the export sector's sporadic performance, the weak Canadian dollar and stronger U.S. economy will allow the trade sector to contribute to overall economic growth in 2016. Export volumes are forecast to expand by 2.5 per cent in 2016, adding 0.6 percentage points to the Canadian economy.

Another area that is expected to provide a boost to Canada's outlook is the public sector. The new federal government is expected to pump around $10 billion into the economy in fiscal years 2016-17 and 2017-18. This adds about 0.3 per cent to real GDP growth this year.

Glen Hodgson, the Conference Board's Senior Vice-President and Chief Economist, will present his analysis of the latest economic numbers for Canada, its provinces, the United States, and the world at a live webinar on February 17, 2016 at 02:00 PM EST.

Company info

255 Smyth Road
Ottawa, ON
CA, K1H 8M7


Read more

More from Industry News

Sponsored Brought to you by: Machinex Logo

Discover the main features of a reliable & efficient baler

Single-Ram and II-Ram High-Capacity Balers

At Machinex, we've been designing sorting systems for over 35 years, so we know how essential it is for MRF operators to have a baler they can trust and not worry about its operational reliability. This is why we design and manufacture reliable single-ram and II-ram high-capacity balers to specifically help optimize their operations.

 Watch the video of our expert who presents the main features of Machinex balers delivering these important benefits:

  • Easy & accessible maintenance
  • Reduced maintenance & bale handling costs
  • Energy savings
  • Optimal bale density
Learn more
Sponsored Brought to you by: Komptech Americas LLC. Logo

How to streamline C&D waste processing to increase profitability

For C&D recyclers, waste haulers, demolition contractors and landfills, there is a growing opportunity to profit from rethinking processes. Although every operation is different, by streamlining the front end of the C&D operation processes with purpose-built technologies, recyclers can tap into new end markets, accommodate higher material volumes, stay ahead of regulatory restrictions, increase recovery rates and add commodity revenue, while decreasing labor and other costs.

Download the new eBook to learn about:

  • Finding opportunities in the alternative to landfilling C&D
  • How facilities can increase their profits from C&D
  • Using the right C&D processing technology in the right locations
Learn more

Get our newsletter

Subscribe to our free magazine

Get Our Magazine

Paper or Digital delivered monthly to you

Subscribe or Renew Learn more

Get our newsletter