Tài liệu Resource-Rich Provinces Will Continue To Drive Sales Gains In Canada ppt

Carlos Gomes (416) 866-4735

[email protected]

Global Economic Research

Global Auto Report

Global Auto Report is available on: www.scotiabank.com, Bloomberg at SCOE and Reuters at SM1C

Scotiabank Economics

Scotia Plaza 40 King Street West, 63rd Floor

Toronto, Ontario Canada M5H 1H1

Tel: (416) 866-6253 Fax: (416) 866-2829

Email: [email protected]

This report has been prepared by Scotiabank Economics as a resource for the clients of Scotiabank.

Opinions, estimates and projections contained herein are our own as of the date hereof and are

subject to change without notice. The information and opinions contained herein have been

compiled or arrived at from sources believed reliable but no representation or warranty, express or

implied, is made as to their accuracy or completeness. Neither Scotiabank nor its affiliates accepts

any liability whatsoever for any loss arising from any use of this report or its contents.

TM Trademark of The Bank of Nova Scotia. Used under license, where applicable.

Canadian auto sales climbed 6% last year, and will likely edge up

further in 2013, advancing to 1.69 million units — the second￾highest level on record. The resource-rich provinces of Alberta,

Saskatchewan and Newfoundland & Labrador will continue to lead

gains. Purchases in these provinces set record highs in 2012, climbing

above the 2007 peak. In contrast, even with a moderate gain this year,

volumes in the rest of Canada will remain 6% below the 2002 peak.

Labour markets, demographic trends and development activity are

strongest in Western Canada, while a ramp-up of several projects on the east

coast will support regional gains. Commodity prices have rebounded since

last summer, and will be underpinned over the coming year by the recent

pick-up of economic growth in China and improving global financial market

conditions. Global equity markets have advanced by more than 20% since

mid-2012, including 5% during the first four weeks of 2013.

Alberta will be the auto industry’s growth leader in 2013. Vehicle sales in Alberta climbed to 239,000 units

last year — the second-highest on record. We expect volumes to advance to 244,000 units in 2013, approaching

the 2007 peak of 249,000 cars and light trucks. Sales will be bolstered by a buoyant labour market, record

population inflows and a continuing, albeit single-digit increase in energy sector investments. Unemployment in

Alberta has dropped to only 4.5% — the lowest level in Canada and nearly 3 percentage points below the national

average. Meanwhile, population growth accelerated to 2.5% last year — nearly triple the advance in the rest of

Canada. Alberta’s driving-age population is increasing at even a faster pace. Despite these positive developments,

the improvement in vehicle sales will be dampened by some slowing in energy sector investment. The export

price for Canadian heavy crude has fallen to a substantial discount from international benchmark prices due to

export pipeline constraints. The sharp widening in the discount for Canadian heavy crude oil is hurting Alberta’s

public finances, prompting its premier to warn last week of a $6 bn revenue shortfall for the 2013-14 fiscal year.

Vehicle sales in Saskatchewan climbed to a record-high 55,000 units in 2012, buoyed by a solid gain in farm

incomes and ongoing expansion of the mineral sector. An increase in purchases to 56,000 units is projected for

2013, bolstered by the government of Saskatchewan’s commitment to spent at least $2.5 bn on infrastructure over

the next several years and the scheduled start-up of the Cigar Lake uranium mine in late 2013. Despite declining

mineral and natural gas production in Saskatchewan over the past year, the province still expects investments of

nearly $45 billion in major resource projects over the next decade — a development which will keep labour and

auto markets among the strongest in Canada.

Newfoundland & Labrador also reported record car and light truck sales in 2012, with volumes jumping to

33,000 units — 29% above the 2001-08 average. Purchases will be boosted this year by a rebound in offshore oil

production and increased iron ore output. After weakening in the first half of 2012 alongside slowing global

economic activity, China’s imports of iron ore jumped to record highs late last year, setting the stage for higher

prices and a ramp-up in iron ore production across Newfoundland in 2013. Oil output is also set to rebound, with

production resuming at both the Sea Rose and Terra Nova projects, after being offline for maintenance last year.

However, longer-term gains in car and light trucks sales will be constrained by weak vehicle-buying

demographics in Newfoundland. In fact, the demographic outlook is worse for the province than for its Maritime

Resource-Rich Provinces Will Continue To Drive Sales Gains In Canada

January 30, 2013

1.2

1.3

1.4

1.5

200

250

300

350

400

00 02 04 06 08 10 12

thousands of units

Vehicle Sales --

Resource-Rich

Provinces*

(LHS)

Rest of Canada

(RHS) forecast

millions of units

* Alberta, Saskatchewan, Newfoundland & Labrador.

Record Sales

In Resource-Rich Provinces