After 2016, a year of ups and downs for the Canadian economy, there’s a growing body of evidence suggesting 2017 will be a better year.
Here are five big reasons the economy could do a lot better than you might think this year.
The job market is recovering
It may be cold comfort to anyone still looking for work, but Canada’s job market ended 2016 on a bit of a tear, adding more than 200,000 jobs from August onwards.
On the whole, there were more part-time jobs created in 2016 than full-time ones, but one big bank economist says it may be time to give up the notion that such jobs are somehow less desirable.
Oil could be headed higher
Canada’s economy is intrinsically linked to the price of oil, which is a big part of what made 2015 and 2016 such a bumpy ride. From a high of over $100 US a barrel in late 2014, oil bottomed out at under $30 US a barrel last year, wiping out billions from the stock market — not to mention tens of thousands of oilpatch jobs in the process.
But ever since last fall, crude has been on a steady, albeit slow, march higher, up $10 a barrel in the past month.
The loonie could be headed higher
It’s not hard to come up with arguments explaining why the Canadian dollar could be in for a rough 2017. While those forecasts still hold up, at least one expert says those predictions are far too bleak and he has a solid track record of being right. The Canadian economy will feel the positive effects of an acceleration of growth worldwide and the risks to trade with the U.S.
Trade is picking up
Statistics Canada reported that Canada swung to a trade surplus for the first time in two years in November, as the economy exported $526 million more than it imported that month. Everything from energy products, to potash, aerospace parts and canola was booming, an encouraging sign of broad and diverse strength.
The TSX is near an all-time high
In the markets, the TSX came within a few points of its all-time high of 15,685 points this week, set back in September 2014 — before oil’s decline waylaid the market. As economic indicators go, the TSX is far from perfect. But an all-time high for a country’s dominant stock index is the sort of thing that tends to draw attention. Witness the hubbub in the U.S. right now over the Dow Jones, which has been flirting with passing the 20,000 point level for the first time for about a month now.